In a bid to help revive the tea industry, the West Bengal government has fully exempted tea gardens from payment of agricultural income tax for two fiscals (FY’19 and FY’20).
The State government has also exempted the levy of education cess and rural employment cess on green tea leaves for the financial year 2018-19.
“The full exemption will benefit lakhs of tea garden workers,” Amit Mitra, State Finance Minister said, while announcing the State budget here on Wednesday.
India is the second largest producer of tea in the world after China. The sector employs 1.5 million people directly and 4.5 million people indirectly, said Parimal Shah, Vice-President, MK Jokai Agri Plantations.
Nearly 18 per cent of tea produced in India are exported. The annual turnover of the industry is pegged at ₹30,000 crore.
According to Azam Monem, Chairman of Indian Tea Association, the immediate impact of the exemption may not be felt as most of the tea companies are in re; however, the two-year moratorium may allow some companies to plough back profits.
Only about 10 per cent of the tea companies have been making some marginal profits. “Darjeeling is entirely in losses; there are some 20-odd estates in Dooars which are showing marginal profits,” he said.
According to AN Singh, Managing Director and CEO, Goodricke Group, it is a good gesture on the part of the State government. It will result in some savings if the industry does well moving forward.
Andrew Yule & Co, which has have five estates in West Bengal, hopes to gain from this waiving off of the tax for tea estates for 2018-19, Debasis Jana, CMD, Andrew Yule, said.