The Hindu Business Line : UPASI flays move to claim tax arrears from brokers

THE Government cannot arbitrarily decide to claim tax arrears with retrospective effect from the brokers, for it will affect every strata of the tea industry, the United Planters' Association of Southern India (UPASI) has said.

Speaking to Business Line after a meeting convened by UPASI with all sections of the tea industry, Mr D.P. Maheshwari, Chairman, UPASI Tea Committee, said the Government's decision to re-open assessment for the year 1999-00 and 2000-01, claiming all sales at Coimbatore and Coonoor auction centres as local or TNGST sales, will ultimately be borne by the producer and the small grower.

"The demand notice claiming tax arrears with retrospective effect may have been slapped on the brokers but it is a misconception to think that it is broker problem. The brokers under auction rules are indemnified by the seller and the buyer. While the buyer is unlikely to pay up, ultimately it is the producer and the small grower who will have to pay the tax differential," he argued.

According to Mr Maheshwari, inter-State sales under the well-drafted rules conforming to CST rules have been held at the auctions centres over the last 20 years. Due assessment has been done without any problems. So why the sudden decision to change an age-old practice, is the query.

"As a direct consequence, producers are going to actively divert teas to other regional auction centres. That apart, the high taxes will also keep upcountry buyers away from Tamil Nadu. It is bad news for all around. The situation is indeed grim," he said.

Mr Ullas Menon, Secretary General, UPASI, told Business Line that it is an industry issue. "The brokers had replied to the notices, which had been first issued in August. However, there has been no response from the authorities; instead they have been slapped with recovery notices again,'' he said.

According to Mr Menon even if the trade were to take up the matter with the Appellate Tribunal, it would have to cough up a certain percentage of the demand upfront. "The industry is not in a situation to pay up even this," he added.

While auctions for this week remained suspended at both the Coimbatore and Coonoor centres, the trade has decided to wait for the outcome of the delegation comprising bought leaf producers and small growers to Chennai before meeting again on the issue.

"There has been no concrete decision with regard to the future course of action. We will wait to hear the outcome of the delegation's visit to Chennai before reviewing the situation again," Mr Menon said.

However , with the auctioneers of the view that no sale can be conducted given that the extent of the their liabilities is unknown, it is unlikely that auctions will be held at both Coimbatore and Coonoor centres next week too.

Article E-Mail :: Comment :: Syndication

Stories in this Section
NCDEX gets Govt recognition

Plea to ensure mandatory upgradation of rice mills

Shortfall in Oct fertiliser output

Farmers' own `curdy' pesticide

UPASI flays move to claim tax arrears from brokers

Rubber static on low-key activity

New grain export policy gets mixed response

Icrisat gets another $1 m donation from Sehgal Foundation

Bt cotton area trebles

`Tariffs curtail US agri exports to India'