The storm brewing in the tea cup due to the GST implementation continued at Sale No: 28 of the auctions of Coonoor Tea Trade Association (CTTA) which concluded on Friday. This was the second auction held after the roll-out of the GST on July 1.

In the first auction held in post-GST regime, a whopping 95 per cent of the teas on offer equivalent to 16.54 lakh kg worth₹13.65 crore had remained unsold.

“It was better this week compared to last week, but now also, major buyers and exporters did not participate”, CTTA Chairman Ramesh Bhojarajan told Business Line .

This week, about 54 per cent of the offer equivalent to 10.85 lakh kg worth ₹7.75 crore remained unsold.

In other words, the sale volume is less than the unsold volume – a volume of 9.30 lakh kg worth about ₹6.64 crore was sold this week.

According to trading sources, some portion of the teas which remained unsold at last week’s auction had been sold in private in the course of this week. Ironically, the buyers had bought such teas in private under the ‘sellers’ billing pattern’ in protest of which, they had not bought at the auctions.

Buyers who had refrained from bidding this week are insisting on ‘brokers’ billing’ pattern whereby the sellers have to raise the bills on brokers who, in turn, will raise them on buyers. They want this system to take ‘input credit’ and identify the sellers under the GST.

“At this rate, we are afraid that the bought-leaf factories will not pay us even ₹12 a kg fixed by Tea Board for our green leaf this month. This will adversely affect the economy of not only the 65,000 small growers’ families but the entire Nilgiris district”, H Thiagarajan, President The Nilgiris Small Tea Growers’ Association, said.

Meanwhile, sources in bought-leaf factories said that they are deliberating to close factories to stop production for some days as unsold volume is piling.

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