The Hindu Business Line : TN seeks Rs 10/kg for green leaf tea to cut VAT

Blowing hot & cold
Industry has to pay Rs 55 a kg for made tea.
A section of the industry says demand-supply situation should determine price.
Corporate sector not a party to the decision, not represented at the meeting.

Coimbatore April 5 Tamil Nadu has come up with a condition to reduce the value-added tax (VAT) imposed on tea at the auctions centres to one per cent from the current level of four per cent.

At a recent meeting with industry representatives, the Tamil Nadu Minister for Commercial Taxed, Mr S.N. M. Udayadullah, assured to bring down the rate to one per cent for teas sold at the Coimbatore and Coonoor auction centres and in private sales "if" the parties agreed that "from May 1, the manufacturers will be paid a minimum price of Rs 55 a kg of made tea and they in turn pay a minimum of Rs 10 per kg of green leaf to tea growers."

Gain to small growers

Tea industry representatives comprising growers, manufacturers, brokers, buyers and exporters and the Government appear to have agreed to a deal

The deal will help small growers get at least Rs 10 a kg of green leaf.

While representatives of the Small Growers Association, Bought Leaf Association, Exporters Association and Tea Brokers were signatories to the agreement, a section of the industry has expressed displeasure to this understanding. They contented that the demand supply equation should determine the price level. "The Government could have a mechanism for fixing the minimum support price," a source said.

Fears

It is learnt that the corporate sector was neither a party to this agreement nor were represented at that meeting.

Expressing apprehension about this consensus, the source said: "The poorer type of teas which are quoting at Rs 38 a kg at present would start quoting at the base rate of Rs 55 without any improvement in quality. This would only de-motivate those on the border line from improving the quality of the teas produced by them."

Some even contend that it is a decision taken by the minority groups.

Difficulties

Manufacturers and exporters of tea, who were present at the meeting, explained the practical difficulties to the Minister because of the 4 per cent VAT rate and said that this would put them off from competing with Assam and West Bengal, where the rate was reduced to 1 per cent.

More Stories on : Tea | Taxation | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Food Processing Sector: Opportunity by the ladlefuls

Cheaper food items peg down inflation to 6.39%

Rubber prices rule flat

TN seeks Rs 10/kg for green leaf tea to cut VAT

Lorry strike hits Nilgiri tea units

Tea replanting package pact on June 29

`Concept of Kanan Devan company a sustainable model'

Rossell Tea promoters plan to make open offer for 20%

Metal stocks post smart gains on firm global prices

Union wants Nabard to regulate micro finance

Coir Board aid for pith conversion into manure

FDI in tobacco: `No change in policy'

Cardamom prices continue upward trend

Pepper futures continue to rise

Jeera gains on speculation

African cotton growers seek ban on subsidised exports