Agriculture income tax: Tea industry calls for a five-year exemption

STAFF REPORTER

GUWAHATI: Ahead of the State Budget for the year 2020-21 to be tabled in the Assembly on March 6, the tea industry has approached Dispur seeking exemption from paying agricultural income tax for the next three to five years.

In their pre-Budget memoranda to the State Finance Department, various tea associations said that the agricultural income constitutes 60 per cent of the total income, on which tax is being levied at 30 per cent.

"Given the cost pressures faced by the industry, it is submitted that exemption from payment of agricultural income tax be granted to the tea sector for a period of three to five years in line with similar exemptions granted by other State governments," a memorandum said.

An industry official said the tea industry in Assam is passing through an unprecedented crisis due to the increasing cost of production. "Increasing cost would not have been a crisis had the planters got remunerative costs at the auctions. Prices at the auctions have remained static for the last five years or so and coupled with increasing cost of inputs, price realization is not commensurate with the cost of production," he pointed out.

The situation has reached such a pass that teas at the Guwahati Tea Auction Centre (GTAC) are fetching as low as Rs 50-60 per kg at present. The supply mismatch is also one of the reasons for the low realization of price at the farm-gate level; and the worry is now one of survival what with huge production. With an aim to maintain a balance between demand and supply, the Tea Board of India recently issued show-cause notices to 101 tea manufacturing units in Assam for excess production.

"Excess production has become a curse for the beleaguered tea industry as it leads to imbalance in demand and supply, bringing down the prices," the official said.

He hoped that the State Government would realize the crisis being faced by the State's tea industry and initiate steps in the Budget to bring some relief for the industry.

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