Tea majors avoiding Guwahati auction centre

Staff reporter
GUWAHATI, Sept 27 – Tea giants like the Warren Tea, Assam Company, Jorehaut Group and MK Shah, which have their major tea gardens in the State, are allegedly selling less than one per cent of their Assam crop through the Guwahati Tea Auction Centre (GTAC). What is more, only 30 per cent of the State’s tea is sold through the GTAC. The above companies are selling the lion’s share of their Assam crop through the Calcutta Tea Auction Centre, known as the CTTA. The revenue loss caused by this practice of the companies to the State exchequer is estimated to be at least Rs 10 crore annually. This is despite the fact that these companies are using the prime highland, which is a precious resource of the State.

The bought tealeaf factories are also no different in their attitude towards the GTAC. Though these factories produce over 100 million kgs of made tea per annum, that is, 20 per cent of the total crop, they allegedly send less than 20 per cent of their produce to the GTAC.

It needs mention here that the sales in the GTAC came down to 142.36 million kgs in 2006 against 159.43 million kgs in 2000 – a drop of nearly 11 per cent. During the same period, sales in the CTTA rose by about 37 per cent from 98.11 million kgs to 134.70 million kgs. And more than 80 per cent of the tea sold through the CTTA is the produce of Assam.

The case of the bought tealeaf factories seems to be more hideous when the incentives granted to them under the North East Industrial Investment Promotion Policy (NEIIPP) 2007 is taken into account.

The NEIIPP incentives for a period of ten years include 30 per cent capital investment subsidy on plant and machinery, 100 per cent excise duty exemption on finished products, reimbursement of premium on comprehensive insurance, 100 per cent income tax exemption and 3 per cent working capital interest subsidy.

According to records, in 2007, the Jorehaut group sent no quantity of its Assam crop of 3971400 kgs to the GTAC and sent 37.02 per cent of the crop to the CTTA. The MK Shah group sent 61.06 per cent of its total Assam crop of 9809935 kgs to the CTTA and remained absent in the GTAC.

The Grob Tea Company, which produced 3301092 kgs of tea in Assam, sent only 1.68 percent of the crop to the GTAC, while 33.88 per cent of the crop went to the CTTA.

Similarly, the Assam Company Ltd sent 31.57 per cent of its total Assam crop of 18057611 kgs to the CTTA leaving a meagre 0.14 per cent to be auctioned at the GTAC. The Warren Tea Ltd sent only 0.12 per cent of its Assam crop of 14632088 kgs to the GTAC that year, while 53.92 per cent of that yield was sent to the CTTA.

The Andrew Yule sold 9.16 per cent of its total produce of 5697317 kgs through the GTAC and 60.89 per cent of the produce through the CTTA that year. The Goodricke sold only 9.92 per cent of its total produce of 12954579 kgs in Assam that year through the GTAC, sending 60.51 per cent of the produce to the CTTA in the same year.

However, in the same year, the McLeod Russel sold 24.89 per cent of its Assam crop through the GTAC and 17.86 per cent of the crop through the CTTA. Similarly, the Amalgamated Plantations Pvt Ltd, which was earlier known as the Tata Tea, sold 17.99 per cent of its Assam crop through the GTAC and 17.72 per cent of the crop through the CTTA.

Secretary of the GTAC Jayanta Kakati has refuted the impression given by the big tea companies that price realisation in CTTA is better than the GTAC as a wrong one. He said, if the ‘same quality’ of CTC teas were sold in both GTAC and CTTA, price realisation would remain the same. And if an additional selling expense of Rs 2.60 per kg for selling in CTTA were taken into account, the seller would be benefited at the GTAC.

Vice-Chairman of the North Eastern Tea Association (NETA) Bidyananda Barkakoty suggested better exposure of the sellers to the export buyers, exemption of the export buyers from sales tax registration, waiving of the proposed Cess of 20 paisa per kg of purchased green leaf on the quantity of such tea sold through the Guwahati Auction Centre and transport subsidy to the GTAC registered buyers under the NEIIP 2007, to boost up sales at the Auction Centre. source: assam tribune