The Hindu Business Line : Coir sector opposes cess on turnover

Kochi, Oct. 28 The Indian Coir Association has expressed concern over the move of the Kerala Government to impose one per cent cess on the turnover of all engaged in the business of coir in the State.

Addressing the 51st annual general meeting, Mr John Chacko, Chairman of the association, pointed out that imposition of cess comes under Concurrent List and coir exporters are already paying a cess to the Centre for Coir Board’s export promotion purposes.

‘Against principles’

The proposed cess of the State Government will be against the accepted principles of export promotion and will have a cascading effect as coir items undergo different stages in between small-scale manufacturers and traders before final export. He said that only coir exporters based in Kerala would have to bear this one per cent cess and it would result in setting up of new factories outside the State.

Though the Association is not against Government implementing welfare measures to deserving workers through appropriate budget allocation, it is worth examining whether it is advisable to bring one more legislation just for collecting a revenue of Rs 3.25 crore by imposing a State-level cess, he said.

As per the Kerala High Court order in 2003, certain provisions of the Kerala Coir Workers Welfare Fund Act, 1987 stipulating contribution based on turnover of coir exporters were declared invalid. However, the State Government is giving a reincarnation to the same invalid provisions by bringing an additional legislation after four years under the name Kerala Cor Workers Welfare Cess Act.

Bonus issue

Another problem the industry has been facing is the ever-growing bonus rate, which now stands at 29.57 per cent. Every year, to buy peace, the association agreed to a marginal increase. It is high time this is frozen and eventually reversed, he added.

The trade unions had recently initiated a wage standardisation move. They are looking to standardise the wages across all sectors of the industry. The workers in the organised factories already enjoy high and in some cases exorbitant wages. This will only deter investment in factories.

According to the association, the mindset of the unions and the Government must be to bring about an investment climate in the State to encourage the industry to set up more factories, thereby bringing more and more employees into the organised sector. They should understand that the neighbouring States are waiting with open arms to welcome such industries that can generate huge employment, he said.

More Stories on : Coir | Excise and Customs | Industry Associations | Kerala

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