Mid-June tea auction to take 4% procurement cost hit due to GST rollout

Input credit impasse adds to brokers' woes; mid-June is key auction as year's best tea is sold then

The Goods and Services Tax's (GST) rollout is likely to hurt tea industry's mid-June auction as the effective procurement cost for brokers, who sell tea in auction centres, is going to escalate nearly four per cent.

Another issue that brokers will have to deal with is the uncertainty over input credit.

The tax rate under the current system varies from state to state. While the Assam government charges a 0.5 per cent value added tax (VAT) and 0.25 central sales tax in the auctions, the West Bengal government charges a per cent flat rate VAT for sales from auction centres.