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G.K. Nair

KOCHI, April 9

THE State Government's orders directing the officers of the Sales Tax Department to proceed with assessment and levy of tax on the planters and to re-open the completed assessments, if the assessment are not barred by limitation, have evoked criticism from the trade.

Mr Anil Kumar N. Prabhu, Chairman, Tea Trade Association of Cochin (TTAC), and Mr O.R.M. Prabhu, former Chairman, told Business Line that the circular was issued without careful examination of the legal position especially the provisions of Rule 9(k) and the procedure adopted in the past by the department from April 1,1984. Hence, they urged the Government to withdraw its order dated November 22, 2002.

They said the procedure adopted in the case of auction sale of tea at Cochin from April 1, 1984, is that when the agent, i.e., the broker, is paying sales tax, then the principal, who is the planter, was granted exemption in respect of that turn over.

Till March 31, 1984, sales tax on auction sales was paid by the planters themselves and the assessments were done on them. The brokers were, therefore, not liable for payment of sales tax and exempted from sales tax levy.

However, from April 1, 1984, after a series of discussions between the Government and the association, the latter had agreed for change in the system of payment of tax and that the brokers, for and on behalf of the planters, began to collect sales tax on the auction sale and remitted this amount to the assessing authority here.

All assessing authorities in the State are giving exemption to tea planters on the basis of the certificates issued by the brokers regarding ST payment of auction sales in accordance with the provisions contained in Rule 9(k) of the Kerala General Sales Tax Rules, 1963.

Now, the Sales Tax Department are issuing assessment notices to tea estates in Kerala and Tamil Nadu, which had sold their teas through auctions at Cochin despite producing the tax deduction certificates issued by the brokers who had paid the sales tax, they alleged.

They said the order to re-open assessments of tea planters had come at a time when all the tea estates were facing severe financial crunch. In many estates, even plucking was not done.

The orders to levy tax on them when they had already paid the tax through brokers will wipe out tea plantations in the State, they argued.

Moreover, sizeable quantity of tea is coming from Tamil Nadu for auction sale at Cochin from which Kerala State is now getting sales tax. The present circular to levy tax on the tea planters will abruptly stop the arrival of tea at Cochin auction from outside the State.

he tea planters in Kerala also may switch over to the auction centres at Coimbatore or Coonoor by transferring their stock to those places for auction sale and thereby the State would lose the present tax revenue from tea also, they pointed out.

"Once the tea trade is diverted to other auction centres outside Kerala, it will be most difficult to bring it back to Cochin auction centre again", they warned.

On the other hand, the head load workers here and in the tea plantations and the labourers there may also go out of work by the illegal and drastic measure to levy tax twice on tea sold in auction ignoring the provisions in Rule 9(k) of the Kerala General Sales Tax Rules, which will definitely jeopardise the tea industry and trade in this state, they said.

Article E-Mail :: Comment :: Syndication

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