Vijayan Rajes, the outgoing President of UPASI, urged for a holistic restructure of the plantation industry, failing which, he said, “the country would become a net importer of plantation commodities.”
Delivering the presidential address at the 122nd Annual Conference of the association at Coonoor this morning, he said the sector is governed by 24 different legislations by both the Union and State governments. Sixteen different commercial taxes are payable to both the governments and local panchayats.
Social welfare legislations were enacted as early as 1950 to regulate wages, improve living conditions, introduce sanitation, water supply, provide health care, etc.
“Local governments did not exist then, but even after they were legislated in 1992, such social costs were not shifted to the local bodies who levy taxes for provision of such services. This has rendered the Indian plantation industry uncompetitive in the export arena. This anomaly must be corrected immediately, else the survival of the plantations would be at stake,” Rajes said, voicing concern over the increasing social cost.
Agricultural Income Tax (AIT) is yet another issue he said and pointed out that the industry is being taxed on income earned by both the centre and the State.
“Companies in Kerala and Karnataka pay 50 per cent and 35 per cent respectively as AIT in addition to central income tax. And in Kerala, ₹700 per yielding hectare is levied as Plantation Tax.”
Alleging the taxation regime as being punitive on plantations, he appealed to the powers that be to take a re-look at the archaic commodity acts, stressing the need for a restructure of the same.
“Excessive multiple taxes of the Centre, State and local governments should be rationalised and fine-tuned to suit the realities of modern times. Short-term and short-sighted policies on land, taxes, duties and bureaucratic delay have no role in global free trade arena,” the outgoing President said.
Taxation complexities apart, Rajes stressed the need for sanctioning of funds for tea and coffee research, as these have been pending with the Ministry of Commerce for quite a while now.
He did not fail to add that the industry is ready, willing and able to work in tandem with the government.
“The industry has not lost its sheen,” he told BusinessLine.