Tea Tax Waiver a relief

Darjeeling : The Bengal government has waived agriculture income tax across the state for the next three years. The decision is expected to bring relief to the tea industry, which has been reeling from losses for more than a decade.

A notification issued by the government on July 5 — a copy of which is with The Telegraph — has also spelt out a special scheme to settle the amount of unpaid agricultural income tax and the interest incurred as penalty over the years. The waiver will come into effect from the 2006-2007 financial year and will continue till 2008-2009.

In a particular year, the agricultural income tax is computed on 60 per cent of the profits earned by a company/ garden in that year. The normal income tax is calculated on the remaining 40 per cent. Under the new scheme, there will be no change in the income tax policy: the tea companies will have to continue paying that.

Sources said agriculture income tax for the tea companies was as high as 30 per cent of the 60 per cent of profits on which it was calculated while the interest payable as penalty for non-payment was two per cent of the tax each month. For the next three years, the gardens will not have to pay this tax.

Under the special scheme, provisions have also been made to reduce the penalty incurred by 75 per cent, provided the tax has been paid for any previous year on or before March 31, 2007. But the arrears (the remaining tax and the 25 per cent penalty) will have to be paid in “lumpsums” anytime between April 1, 2007 and March 31, 2009.

However, if no agriculture income tax for any year has been paid on or before March 31, 2007, the government will waive the total interest on condition that the unpaid taxes will be paid by March 31, 2009. The notification will be considered as having come into effect from June 1, 2007.

Sources said the state government decided to come up with the special scheme so that gardens find it “attractive to pay the tax”. Some of the reasons why these estates have been defaulting on payment are erosion of good market and high cost of production.

Sandeep Mukherjee, secretary, Darjeeling Tea Association, while confirming the special scheme, said: “We welcome the move. It will bring about some relief to the tea gardens.”

Source: The Telegraph