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Deeptha Rajkumar

However, buyer members will be participating in the Teaserve auctions on Wednesday.

Wellington , Nov. 18

TAKING a unanimous stand, the tea trade - buyers and bought leaf manufacturers - at an emergency meeting on Tuesday decided to stand by the broking community's decision to suspend auctions in Tamil Nadu this week. The suspension is in protest against the Tamil Nadu Government's move to slap notice demanding sales tax arrears from brokers after reopening files of 1999-2000 and 2000-01 fiscals.

The State has said all sales during the fiscal were covered under the Tamil Nadu General Sales Tax (TNGST) and not Central Sales Tax (CST). This means the brokers will have to return the concessional duties they had enjoyed under CST.

Mr L.C. Singhania, former president of the Coonoor Tea Buyers' Association, said it was a trade decision to support to the agitating brokers.

Reiterating this, Mr N.K. Krishnamurthi, President, Nilgiris Bought Leaf Association, told Business Line: "It is a trade problem, for ultimately the liability will be passed on to the buyers and sellers/producers, and this in turn will impact the small grower adversely."

According to him, a delegation of bought leaf producers will leave for Chennai to meet officials and the Minister concerned.

Trade sources said the decision to suspend auctions for the next week would be reviewed at a meeting this weekend with the Coonoor Tea Trade Association.

"We will wait for the delegation to be back from Chennai so as to be apprised of the Government response," Mr Singhania said.

Early in the day, a small delegation comprising buyers, sellers and tea brokers also met the Tea Board Executive Director, Mr Vikram Kapur, requesting the board's intervention on the issue of the Government slapping sales tax notice. Mr Kapur has assured the trade that he would look into the matter.

Meanwhile, buyer members said they would be participating in the Teaserve auctions to be held on Wednesday. A moot point to note is that the Teaserve has also received intimation that all auctions sales henceforth will be treated as sales under the TNGST. However, since the auction centre enjoys tax concession, the buyers do not stand to lose by participating in the sales there.

When contacted, Teaserve officials told Business Line that 8.6 lakh kg of tea would be auctioned on Wednesday. Of this, almost 5.2-lakh kg of tea will be Indco teas, with some reprint lots amounting to another one lakh kg.

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