Kerala?s decision to double tax on plantation land has the sector worried. Association of Planters of Kerala (APK) said the government?s move to enhance plantation tax by 100% and land tax by 150% would affect the industry badly, with prices of tea, rubber and cardamom on the decline. The Kerala government is facing an acute cash crunch and the decision to close bars would add to the financial problems.
Kerala is home to several plantations and contributes 46% of India?s plantation produce, valued around R20,000 crore. APK sources added Kerala is the only state which levies plantation tax. The revised tax would apply to coconut, arecanut, rubber, coffee, tea, cardamom and pepper plantations. Those with area of up to two hectares have been exempted. The tax on plantations of two to four hectares would be R100 a hectare and the rates will double for higher slabs.
The Plantation Study Committee formed in 2010 had recommended abolishing plantation tax and agriculture income tax, considering the importance of the plantation industry for the state, Gilbert Dsouza, chairman of APK, said. ?The price of tea has fallen by 30%, rubber by 40% and cardamom by 50%. Considering the crisis faced by the plantation industry, the sector was expecting relief. But this imposition of higher tax will only make the plantation industry bleed and sink,? he added.
Gilbert said at present there is a mismatch between high cost of production and price realisation on the commodities. ?This is creating a serious cash flow position for the industry. Prices of tea and rubber are dropping day by day and estate operations are slowly reaching a halt. It may revert to the 1999-2006 situation,? he pointed out.
Kerala has a substantial share in the four plantation crops of rubber, tea, coffee and cardamom. These four together occupy 7.02 lakh ha, accounting for 34.4% of net cropped area in the state. Kerala?s share in national production of rubber was 87.3%, cardamom 79%, coffee 22% and tea 7% during 2011-12.
