Tax Burden Forces Icta To Stop Coffee Auction

India's only coffee auction system, operated by traders, has been discontinued following the Karnataka government's proposal to impose a three per cent turnover tax on coffee sales in the current financial year.

The auction by Indian Coffee Traders Association (ICTA) was started in October 1995 soon after the coffee board wound up its direct marketing operations.

All India Coffee Merchants Association (Aicma) president R.P. Sarathy said that ICTA auction had been discontinued as the traders felt overburdened by the turnover tax which was applicable for each sale.

"We already pay sales tax in Karnataka and Tamil Nadu which raises our input prices by 12 per cent. Turnover tax will only be an additional burden," he said.

 

Coffee board chairman said with the dscontinuance of the ICTA auctions, there was no auction anywhere in the country for coffee. "The turnover tax was applicable for every broker, and given the brokers profit margin, the levy is a big burden," he said.

The coffee board had taken up the matter with the finance secretary and commercial tax department urging them to react "positively to the issue." .