Tea industry looks for exemption from GST

Kolkata, August 5 (KNN) Tea Industry in the country wants exemption from the Goods and Services Taxes (GST) considering it is an agricultural product.

An official from the Tea Industries Association (TIA) told KNN, “We want an exemption from GST and we also want the existing rates to continue.”

He said that tea has a VAT rate of five per cent and a concessional auction rate of one per cent in West Bengal and 0.5 per cent in Assam.

Tea cultivation, harvesting and manufacturing is primarily an agricultural activity. Tea has been defined as an agricultural produce within the definition of the Service Tax Rules. Further in the Draft Model GST Law "Agriculture" includes floriculture, horticulture, sericulture, the raising of crops, grass or garden produce and also grazing. Therefore tea being a garden produce should come within the definition of Agriculture.

Official also stressed that tea is an item of mass consumption that’s why the industry wants the existing rates to continue.

“The auctions of input tax credit are very limited being a labor intensive industry. Most of our inputs costs are consumed from the labor and power. In GST the input cost credit tax auction is very limited. So we won’t be able to get much benefit of input tax in GST,” he explained.

However, he informed “We have made our representations to Chief Ministers and Finance Minister. We are waiting for their response.” (KNN Bureau)