A National Convention on South Indian Teas is being proposed by CTTA in association with the Tea Board between November 12 and 14 in Coimbatore, said Chandrakant, chairman of the Tea Trade Association of Coimbatore at its 28th Annual General Meeting.

Commercial Taxes and Registration Department Secretary to Tamil Nadu Government, Md. Nasimuddin and R. Ambalavanan, Executive Director of Tea Board – Coonoor were the Chief Guest and Guest of Honour.

Mr.Chandrakant said that this is the fourth edition of the event. It is expected to facilitate tea producers' showcase their teas to buyers from potential tea drinking markets in the country, CTTA Chairman Mr Chandrakant said.

The Convention events would feature visits to estates/ tea factories, sit-in sessions chaired by industry experts, tea tasting session, an exhibition to display innovative products and tea packaging machineries.

Mr.Chandrakant also renewed the plea to the State Government for a uniform VAT (Value Added Tax) rate of one per cent for all teas sold through the auction centres at first point (while estate teas are subject to 4 per cent VAT, the Bought Leaf and Co-operative factories come under 1 per cent VAT).

The association had made the same demand number of times in the past as well.

Mr. Chandrakant addressing the 28th Annual General Meeting highlighted the anomaly in the levy of VAT.

‘The dual VAT rate in the auction centres created unhealthy competition among tea manufacturers.

In the upcountry auction centres such there was not only a total tax exemption for sale of the CTC and Orthodox grades at first point but also a uniform one per cent levy of VAT,' he said.

Uniform VAT would ensure a ‘level-playing field and correction of this anomaly thus encouraging more participation in the public auction system in Tamil Nadu'.

He said that exporters had to wait for six months to claim the VAT refund.

‘Because of the levy of VAT on export purchases, the Coimbatore auction centre lost participation of some major exporters' in the last three years who route their teas through the Cochin Tea Auction centre as export purchases are still exempt from levy of VAT there,' he said.

Overcoming the issue, the Coimbatore tea auction turnover through settlement banking crossed the Rs 100 crore mark and marching towards achieving Rs 150 cr by the end of the current calendar year. n the volumes handled by the Coimbatore auction centre, Mr Chandrakant said it dropped to 14.63 million kg during this year against 15.07 million kg in 2009 and the rates had not been encouraging.

The average price till August 2010 hovered around Rs 63 compared to Rs 79.56 during the same period last year.

A quick glance at the production figures revealed that the South Indian production of tea increased by 15 million kg to 147 million kg during the first 7 months of the current calendar year, while it slipped by 14 million kg in the North, resulting in an overall increase of one million kg in the all Indian volumes.

While seeking measures to resolve the issues in the electronic auction platform for more participation, Mr Chandrakant said it was heartening to note that both the domestic consumption and export of tea was picking up.

He attributed the pick up in export volumes to the promotional measures initiated by the Tea Board in association with tea producers and associations in Egypt, U.A.E, Iran, Kenya and Pakistan.

Mr.Nasimuddin said that he had already taken up the issue of uniform VAT with the State Government and assured to look into the demand personally and said that association could look forward for some announcement soon.

Mr. Ambalavanan exhorted the manufacturers to come out with quality tea and assured to initiate steps for ensuring a good price.

He reminded the tea manufacturers that colouring was a major issue spoiling the market and the prices.

Keywords: Tea exportAssociationVAT

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