Tea planters' association urges govt to reduce sales tax to 4%

The lack of comprehensive reforms and policy changes had led the plantation industry in general and the tea industry in particular into doldrums, said Vijayann P Rajes, chairman, The Planters' Association of Tamil Nadu (PAT).

Speaking at the association's 52nd annual general meeting (AGM), Rajes made a plea to the state government to reduce the sales tax to four per cent till the value-added tax (VAT) is implemented.

"While VAT is implemented, we request that the green tea leaf and raw coffee be exempted from VAT since they are agricultural and perishable goods," he said.

The state's tea production in 2004 was down to 130.7 million kilos as against 131.7 million kilos in 2003. After recording a higher production of 132 million kilos in 1998, the tea production, in subsequent years, had stagnated around 130 million kilos.

Also, there has been a steep fall in the average auction price from the level of Rs 68.80 per kilo in 1998 to Rs 39.94 in 2003, which slightly improved to Rs 47.03 in 2004.

The average price for 2005 is also not likely to be more than Rs 46 per kilo. While the tea industry as a whole is in the red, the cost of production has been rising ranging from Rs 55 to Rs 60 per kilo.

Urging the tea plantation industry to focus towards direct marketing rather than through the auctions to realise higher prices, Rajes felt that the opening up of retail marketing in India to foreign retail trade chains may offer an opportunity to market specially prepared and branded packet teas, directly through such outlets.

Besides the steps taken by the tea plantation industry to become quality conscious and cost effective, the support of both the state and central governments is required to provide an uplift to the ailing tea industry, Rajes added.