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Tea traders in Coimbatore urge Tamil Nadu government to introduce uniform VAT rate

Coimbatore , Sun, 02 Oct 2011 ANI

Coimbatore, Oct 2(ANI): The Tea Trade Association of Coimbatore (TTAC) has urged the Tamil Nadu government to introduce uniform VAT (Value Added Tax) rate for tea sold through auction centres.


After attending the 29th Annual General Meeting of TTAC, Chairman N. Anand, said that the auction centre in Coimbatore and Coonoor are poorly affected, as exporters are buying from Cochin, where no VAT is charged on export purchases.


"We are losing out teas from Coimbatore and Coonoor to Kochi, where there is no VAT on export sales. So, the exporters prefer to operate from Kochi rather then Coimbatore or Coonoor," Anand said.


"Now, this is taking away a lot of quantity and volumes that is being offered in Coimbatore and Coonoor. Now this is what is a major concern, which we actually took forward to the present government, as soon as it got into power, and to the previous government but unfortunately nothing has happened and we have only requested that give us a level playing field. This industry has to grow," he added.


He further said that the state government did not pay heed to the repeated requests made by them and levied different VAT rates in the auctions centres that is one percent for Bought Leaf Factory teas and five per cent for corporate teas.


"The issue on VAT is that the presently we are being charged five percent for corporate teas and one percent for bought leaf teas. What is happening is when you are exporting tea to other countries, you have to pay this VAT and wait for this refund to come from the government," Anand said.


"Now the process, the time that is taken for this, is a long period. Now what is happening is, Cochin, which is another auction centre in south India is not charging any VAT for export sales, now when this happens, it is not a level playing field for all the three centers," he added.


Anand also pointed out that last year, the Coimbatore auction centre sold about 23.19 million kilograms of tea and during the first eight months of 2011, only 12.66 million kilograms of tea was sold.


Thus there was decline in the sale of tea as compared to last year. In 2010, at the same time, 14.63 million kilograms of teas was sold.


India is one of the major producers and exporters of tea in the world market.


The tea production in India for the year 2010 is 960 million kilograms, out of which, south India produces 240 million kilograms.


Out of the total produce of south India, 50 percent is exported to various countries across the globe. (ANI)


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