The Hindu Business Line : Trade plea on extension of 1% VAT on teas sold in auctions

The Tamil Nadu Minister for Commercial Taxes, Mr S.N.M. Ubayadullah, reassured the members of the tea trade that the Government would study the sector’s demand on extension of one per cent VAT levied at first point of sale to all teas sold in the auctions.

He was responding to the demands raised by the sector at the 26th AGM of the Tea Trade Association of Coimbatore.

The association Chairman, Mr C. Shreedharan, had, during his presentation, highlighted certain facts and anomalies under the VAT system and appealed to the Minister to resolve these issues.

Anamolies

He pointed out that no auction centre in the country except Tamil Nadu levied tax on sale of teas meant for exports and that such levy (though refundable) made exports uncompetitive.

Further, the one per cent VAT levied at the first point of sale was restricted only for teas sold in auction and direct first sale by the bought leaf factories and Indcoserve, leaving the estate tea factories and TANTEA outside the ambit of such cover.

Due to this anomaly, some exporters, estate tea producers and TANTEA factories had started to transport their teas to the auction centre in Kochi by paying additional freight.

Yet the offer volumes during the first seven months of 2008 at Coimbatore auction centre increased by 23 per cent to 17.08 million kg against 13.87 million kg during the corresponding months of the previous year.

More Stories on : Tea | Taxation | Tamil Nadu

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