Assam tea industry seeks tax sops, other reliefs

Mumbai, Feb 14 : Faced with rising cost of inputs and prolonged low price realization for the past few years, the tea industry has asked the Assam government for some tax relief in the next budget. In a pre-budget memorandum submitted to the Assam government, the Indian Tea Association, which is an organization of leading planters of Brahmaputra and the Barak Valley of Assam, has mentioned that the crisis-ridden tea industry in Assam merits continued attention and measures from the state government to help it recouping accumulated losses and sustaining operations.

According to a report from Guwahati, the industry has made request for some specific relaxation on different types of taxes imposed on it in the state of Assam having over 800 tea estates. The ITA has requested for increase in deduction of agricultural income tax on tea exports from the state to the level of Rs 6 per kg from the existing rate of Re1 per kg. In fact, ITA has asked for total withdrawal of agricultural income tax on tea in Assam as has already been done by governments in Tamil Nadu and West Bengal to provide relief to the industry. If total withdrawal is not possible, the government should at least consider a moratorium on agricultural income tax on tea for at least six years.

The industry has also asked for certain relaxation of VAT rates in respect of tea sold through the Guwahati Auction Centre as well as on non-auction sale. Moreover, the tea industry, which is bound by the existing Plantation Labour Act to provide food grains and cereals at highly subsidised rates to over 6 lakh tea workers and their families, has asked for a zero VAT regime for the purchase of such cereals and food grains from government allocations.