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Sale No: 27 of the Coonoor Tea Trade Association (CTTA), which concluded on Friday was disastrous, with just 4.75 per cent of the tea on offer sold, as buyers refusing to bid, citing GST blues. This was the first auction after GST was rolled out.
Ever since serious discussions began to roll out GST, corporate buyers had been expressing difficulty to operate under the existing billing pattern. But with the CTTA maintaining status quo in billing, most buyers refrained from purchasing in the auction.
To avail of the ‘input credit’ under GST as also to identify sellers, buyers wanted the new system of billing.
Buyers also contended that they had not been able to get refunds under the earlier VAT system and raised doubts on the efficacy of the GST ‘input credit’.
“The result is that although the average prices rose to ₹82.54 a kg from ₹73.72 last week, only 82,428 kg was sold this week against 12.71 lakh kg last week,” CTTA Chairman Ramesh Bhojarajan told BusinessLine .
As much as 16.54 lakh kg of tea, worth ₹13.65 crore, remained unsold.
“Already, the Tea Board has reduced the average price to be paid to small growers by Bought-leaf factories in July to ₹12 a kg from last month’s ₹14. If this is the way GST works for the auctions, factories will not pay even the ₹12 fixed by the Board,” said H Thiagarajan, President, The Nilgiris Small Tea Growers’ Association.
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