As an industry, tea is more taxed at the State-level. The planters lobby will look forward to continuance of existing benefits under the Income Tax Act.
According to M. Dasgupta, Secretary-General, Indian Tea Association (ITA), the industry is hoping for seamless incorporation of Section 33AB of the Income Tax Act in the new Direct Tax Code
This will allow producers to set aside up to 40 per cent of the pre-tax profits in a good year as designated deposits to be used for developmental activities.
As the Government is moving away from sector-based exemptions to investment-linked provisions, ITA is concerned that the existing I-T benefits may not be continued.
Minimum Alternate Tax
The producers’ association has also suggested that provisions under Minimum Alternate Tax (MAT) be appropriately modified for tea and the plantation sector as a whole.
The association wants MAT be computed on 40 per cent of the book profits as in the case of corporate income tax. Also on the wish-list are: continuance of concessional customs duty on specified tea machinery items and exempting auctioneers’ service from service tax.
Retrospective tax
McLeod Russell, the world’s largest tea producer, wants the existing benefits to continue. But, the company is more interested in fresh clarifications on the Retrospective Tax Amendment.
“We will look forward to clarifications on retrospective amendment of income tax,” said Kamal Baheti, CFO. McLeod which entered in a spree of acquisitions in the last five years is contesting a retrospective tax claim at the Calcutta High Court.
Export incentives
Merchant exporters are looking for concessional import duty on tea bagging and tea packaging machineries which are necessary for value addition and quality upgradation.
Setting up of a tea park which will act as a hub for exporters is also a long standing demand, said Bharat Arya, CEO, J.V. Gokal, a leading tea merchant exporter.
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