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"Subsidy for acquisition of ISO/HACCP and organic certification will be allowed at 50 per cent of the cost of certification, subject to a maximum limit of Rs 75,000."

Kolkata , Sept. 2

THE Tea Board on Tuesday announced a quality upgradation and product diversification subsidy mostly for small-scale tea companies.

The total subsidy corpus has been fixed at Rs 76.80 crore, the scheme being effective during the 10th Five-Year Plan.

According to sources in the tea industry, the scheme was formally communicated by the Tea Board to the Consultative Committee of Plantation Associations (CCPA) only a few days back. On a list of specified activities, the Union Government has decided to give a subsidy of up to 25 per cent subject to a maximum limit of Rs 25 lakh.

The activities identified are setting up of modern blending, processing and packaging facilities, installation of electronic and mechanical sorters for removing foreign particles, purchase of tea machinery for orthodox and green tea production and replacement of old CTC units. Tea companies going in for ISO or HACCP certifications or organising quality upgradation activities may also apply for subsidy under the scheme.

"Subsidy for acquisition of ISO/HACCP and organic certification will be allowed at 50 per cent of the cost of certification, subject to a maximum limit of Rs 75,000," the letter from the Tea Board has stated.

The subsidy will be credit-linked and back-ended, which means that the subsidy amount will be released only after procurement and installation of the machinery. Tea Board has further stated that the scheme will be reviewed at regular intervals. However, tea companies, which are importing machinery under the Export Promotion Capital Goods Scheme (EPCG) scheme, cannot claim subsidy under the scheme.

Similarly, companies availing benefits flowing from the Tea Development Account Scheme - 2001, under Section 33AB of the Income Tax Act, cannot utilise the scheme.

The scheme will be operation during the current Five-Year Plan and will close on October 1, 2006.

The Union Government has categorically stated that priority will be given to bought leaf factories, single estate tea factories and medium sized tea gardens in the range of 200-400 hectares.

Similarly, with regard to modernisation activity, priority would be given to those units who are converting to orthodox tea production, setting up green tea processing facilities and tea bagging, cleaning and blending machinery. It may be noted that the quality upgradation subsidy was a long pending demand of the industry.

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