Plantations urge Kerala govt to withdraw additional tax

Association of Planters of Kerala (APK) today asked the Kerala government to withdraw the additional taxes imposed on the Plantation sector as it would only "bleed and sink" the industry.
The government's decision to raise the Plantation Tax by 100 per cent and Land Tax by 150 per cent has come as a 'shock' to the Plantation industry, particularly at a time when the price of tea and rubber have been falling drastically, APK Chairman, Gilbert Dsouza told reporters here.
The price of tea has fallen by 30 per cent, while price of rubber and cardamom were down by 40 and 50 per cent respectively, he said.

Apart from the statutory commitments, the plantation industry pays a host of taxes, including Plantation Tax, which was only being levied in kerala, 50 per cent Agricultural Income Tax-the highest paid by Kerala plantations in the country, Basic land tax, Vat and sales tax.
In 2010, a Plantation Study Committee, constituted to go into the issues plaguing the sector,had recommended abolishing the Plantation Tax and Agriculture Income tax. Accordingly, a government order was issued, Dsouza said.
The UDF adopted this in their election manifesto and as a first step, the UDF government abolished the Plantation Tax and Agricultural Income Tax for firms and individuals leaving out Companies, he said.

Following the present crisis being faced by the plantation industry, the Industry was expecting further relief. But instead of relief, government has imposed higher taxes which will only "bleed and sink" the industry, he said.

Pointing that there was a mismatch between the high cost of production and price realisation on the commodities, he said this was creating a serious cash flow position to the plantation industry.
With the price of tea and rubber dropping each day, it is difficult to continue operations at the plantations, he said, adding, it may revert to 1999-2006 situation.
APK Secretary, B K Ajit, said the government is planing to raise Rs 3 crore from the plantations by way of the new taxes. However, they will end by spending more than that for sustaining the operations of the platnations.

The total value of plantations in kerala is Rs 20,000 crore. Kerala, considered a "Plantation State", contributes 46 per cent of the plantation produce in the country and supports the livelihood of over 75,00,000 people (around 25 per cent of the state population). It provides employment opportunities for unskilled labour in the state's rural and backward areas due to which the Human Development Index of the rural areas in Kerala was higher than the National Human Development Index.