The Hindu Business Line : Reading the policy leaves

The Tea Board now plans to assist by way of subsidies — 25 per cent for machinery and 50 per cent for acquiring quality standard certificates and organic tea certification.

Some of the issues that are yet to be decided by the Government are:

The industry is subject to dual taxation — 40 per cent of the income is taxed under the Income-Tax Act, 1961 and 60 per cent is subject to agricultural income-tax in the State where the tea is grown.

Lately, the maximum rate of the agricultural income-tax in Assam and West Bengal has been brought down to from 45 per cent to 30 per cent.

However, in some of the Southern States it is still 50-65 per cent.

Therefore, the industry ends up paying more tax than applicable to other industries.

The social cost burden (concessional foodgrains, medical facilities and housing facilities among other benefits for plantation staff) is weighing down most of the tea companies, especially when the companies are not performing well.

Some of the players are of the view that the Government should share the huge social cost burden, which is compulsory according to the Plantations Labour Act, 1951.

Even if the Government takes decisions that would lessen the burden on the players, they have the bigger task of addressing issues such as improving the quality of tea, and the way it is promoted and marketed.

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