GUWAHATI: With the empowered group of state finance ministers meeting in Kolkata from Tuesday to Wednesday on the Goods and Services Tax (GST) regime, Assam’s tea industry representatives have appealed the Centre to keep tea under the concessional rate of 5% GST slab.
The joint forum of Assam Tea Planters’ Association (ATPA), North Eastern Tea Association (NETA) and Bharatiya Cha Parishad (BCP) and Tea Board of India (TBI) vice chairman Bidyananda Barkakoty on Tuesday said any higher rate of taxation on tea will have very adverse impact on the industry.
In a memorandum submitted to the state finance minister Himanta Biswa Sarma, who is also part of the empowered committee, the joint forum argued that tea should be clubbed for taxation at a similar rate as for other items of mass consumption such as flour, pulses and salt. They said that tea being an agricultural produce the income tax Act considers 60% of the income derived from growing and manufacturing tea as an agricultural income.
“Tea is a high labour intensive crop absorbing 60% to 70% of its total cost. Tea market is regulated by the packeteer and blenders and it was difficult on the part of Assam Tea Industry to pass the burden of higher cost to the buyers and ultimately the net realization of tea sales price is reduced,” Barkakoty said.
NETA chairman Manoj Jallan said during the last few years the cost of production of tea has increased because of hike in cost of labour wages and other social costs related to wages.