Karnataka Budget: Coffee cheered

The Karnataka Budget for 2006-07 has given a big relief to individual coffee growers by exempting them from the ambit of the agricultural income tax (AIT) altogether.

"Considering the continuing losses suffered by the coffee growers, I propose to exempt tax on all growers other than firms and companies, and reduce tax on firms from 40 per cent to 30 per cent and companies from 50 per cent to 35 per cent," said deputy chief minister B S Yediyurappa, while presenting the Karnataka budget for 2006-07.

Commenting on the budget, the United Planters' Association of Southern India (UPASI), said it wholeheartedly welcomed the decision taken by the government of Karnataka to exempt farmers other than firms and companies from the ambit of Agricultural Income Tax.

However, M H Ashraff, managing director of Tata Coffee Limited expressed disappointment by saying: "We welcome the government's decision to reduce taxes from 50 per cent to 35 per cent. While considering that the industry is suffering huge losses, it would have been better if the government had followed the Tamil Nadu example of totally abolishing the AIT for all."