Assams Tea Gardens Face Land Recall Threat

The Assam government has threatened to cancel land ownership rights of more than 200 tea gardens for evading taxes, officials and traders said on Friday.

The state's finance department officials said tea companies there had shown "perennial losses" to avoid payment of agricultural income tax from 1984 onwards.

The tax department has since issued notices to the tea companies on tax evasions. "Unsatisfactory reply will lead to recommendation to the state government to take back the land allotted and distribute amongst the local young entrepreneurs," the department said in its notice.

But traders deny charges of tax default.

"Such an allegation is false and baseless," said one company official, who has been named as a defaulter by the state tax department.

 

Assam has more than 800 tea gardens with an annual turnover of Rs 20 billion ($559 million).

The industry contributes about Rs 1.55 billion to the state exchequer.

"If government tries to take away land from the existing companies and distribute it among the local youths, there will be labour problems," said Rajiv Bora, general manager of a leading tea company.

The state chief minister Prafulla Kumar Mahanta is likely to hold discussions with trade officials shortly where the industry plans to suggest simplification of tax procedures, traders said.

Separatist guerrillas have targeted Assams tea industry, accusing companies of diverting their profits out of the state that could have been used for its development.

The government and the industry have jointly raised a 1,900 strong security unit, the Assam Tea Plantation Security Force, to protect planters.. (Reuter)