The Association of Planters of Kerala (APK) has hailed the State government’s decision to abolish agriculture income-tax (AIT), saying Kerala is the only State levying AIT at 30 per cent of profit.

Calling it a long-pending demand, Ajith BK, Secretary of APK, told BusinessLine : “We have been requesting successive governments from the mid 1970s (for an exemption), as it hampers our ability to reinvest. The majority of government-appointed commissions have recommended the removal of AIT.”

The decision to abolish the tax was taken at a State Cabinet meeting in Thiruvananthapuram on Wednesday.

More than 95 per cent of the plantations in the State are making losses and the government is therefore not making much revenues from AIT anyway. Its collection cost vis-a-vis the tax collected is almost 1:8. Hence, AIT neither benefits the State exchequer nor the plantation sector, APK Chairman Thomas Jacob said.

He pointed out that the Justice Krishnan Nair Commission — appointed by the State government to suggest steps to mitigate the crisis faced by the plantation sector — had recommended the abolishment of AIT. Based on this, the Committee of Secretaries appointed by the government to implement the recommendations had suggested a five-year moratorium on AIT.

However, the growers said a moratorium wouldn’t help much. After a detailed study, the government decided to abolish AIT, Jacob said.

According to Ajith, the plantation sector has been making huge losses since 2012 due to the increasing cost of production and low price realisation. The recent floods further impacted the sector’s financial stability, he said, calling for immediate financial support from the government and commodity boards.

Related Topics
comment COMMENT NOW