Teauction.com makes GTAC see red

GUWAHATI, March 22: Guwahati Tea Auction Centre (GTAC) authority sees red over demand for sales tax parity raised by a 'nascent' a Calcutta-based tea trading portal, teauction.com Ltd. Addressing a press conference here this afternoon members of Guwahati Tea Auction Committee informed that teauction.com Ltd which was granted license by the Tea Board of India ignoring strong protest by the GTAC, had been trying hard to persuade State government to grant sales tax parity as enjoyed by the GTAC. The GTAC is of the opinion that teauction.com Ltd which is yet to establish its credibility in the market, should not be treated at par with the GTAC having 30 years of unblemish track record in tea trading in the country. The GTAC which handles average 150 million kgs of tea every year, was granted concessionary rate of Sales Tax (two per cent) by the State government to attract producers to route their produce through the auction centre so that more revenues come to the State's coffer. The State government receives average Rs 26 crore as Sales Tax per year through trading in the GTAC. On February 8 last a delegation comprising members of Guwahati Tea Auction Centre met the Chief Minister and submitted a memorandum highlighting the adverse fall out on the GTAC if Sales Tax party that enjoyed by The GTAC, is granted to teauction.com Ltd. The Guwahati Tea Auction Committee impressed upon the Chief Minister that teauction.com Ltd's claim that it would attract the huge volume of tea which is presently sold on consignment basis directly by the producers without any tax being paid to the State, was not tenable, as it was unlikely that there would be major shift from consignment sales to dotcom sales. The GTAC authority, therefore, pointed out before the State government that if any business was generated by the teauction.com Ltd in case Sales Tax parity granted to the portal, it would be only at the cost of the volume of business presently being done through the GTAC. The GTAC apprehends that grant of Sales Tax parity to teauction.com Ltd will only result in diversion of volume of tea presently sold through the GTAC by certain tea giants to the trading portal. The GTAC pointed out that if its business was affected because of any hasty decision by the State government to grant Sales Tax parity to teauction.com Ltd, about 8000 persons directly or indirectly employed by it would be put into dire straits. The fate of about 12 lakh square feet tea warehousing space in the State would be at stake. Moreover, over the years the GTAC has established its credentials as a regulatory and controlling agency in the tea market whereas teauction.com Ltd is not in a position to play the part of regulatory and controlling agency and therefore, does not deserve Sales Tax parity with that of the GTAC, the State government was told.