GUWAHATI, June 14 - The Joint Forum of Assam Tea Planters� Association (ATPA), North Eastern Tea Association (NETA) and Bharatiya Cha Parishad (BCP) along with Bidyananda Barkakoty, Vice Chairman, Tea Board of India, appraised the concern of Assam Tea Industry on Goods and Services Tax (GST) regime in a memorandum to State�s Finance Minister Himanta Biswa Sarma. It highlighted the various critical issues related to the GST and its impact on the tea industry, said a press release here.
Sarma is taking part in a meeting of the empowered group of State Finance Ministers on June 14 and 15 at Kolkata to finalise the design of GST. Union Finance Minister Arun Jaitley is also expected to address this meeting. Government of India is planning to introduce GST from April 1, 2017.
In the memorandum, the tea industry representatives said tea is a high labour intensive crop. Labour absorbs 60 per cent to 70 per cent of its total production cost of this industry. Tea market is regulated by the packeteers 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 realisation of tea sales price is reduced.
For the last few years, because of adverse weather conditions, severe pest attack, increase in cost of wages and other input costs with no comparative increase in tea sales price, the financial position of most of the tea gardens is not good. Recognising the concern of the tea industry, the Central Government has exempted excise duty on tea for last few years.
Since the empowered committee on GST is evaluating and drafting the GST Act and Rules and also finalising the tax rate on various commodities, it was necessary on the part of the new Finance Minister for being briefed on the critical issues, more specifically the issues related to special taxation in tea auction, the requirement of special rate of GST on tea.
In the past, during imposition of VAT, after due deliberation, special concessional taxation rate for tea was finalised and similar is the requirement when GST regime will be operative. The tea industry of Assam has submitted a detailed justification of keeping the tea under concessional rate of five per cent GST slab and any higher rate of taxation on tea will have very adverse impact on tea industry, they maintained.
�We hope the new vibrant State govt will take care of the critical issues raised by the tea industry on GST so that the largest private sector industry in Assam can survive,� said SC Varma, Chairman, Dibrugarh Branch of Chartered Accountants of India.
�Tea is the common man�s beverage and, therefore, it should be put in the lowest slab of GST,� said Bidyananda Barkakoty, Vice Chairman, Tea Board of India.
