Upasi seeks govt help to revive coffee industry

Udhagamandalam: The United Planters’ Association of South India (Upasi) has requested the Union finance ministry to reconsider the cut in export incentive on coffee and flagged the issue of Rule 7B(1) of the Income Tax Rule, 1962, as that dissuaded farmers from going in for value addition, which they said was the need of the hour.
AL.RM. Nagappan, president, Upasi, said farmers would be taxed for processing coffee and that amounted to the extent of 25% of income earned through the same. The tax collected through 7B(1) is unknown and the information could not be obtained through the Right to Information Act as well.
In a press statement, Upasi said the farmer was deprived of earning a better remuneration for his produce because of this age-old provision in the Income Tax Rules.
In the recent report of the parliamentary standing committee on commerce that was submitted before the Rajya Sabha and Loka Sabha on August 26, there was a recommendation to repeal the Rule 7B(1) of the Income Tax Rules.
Pointing out that plantation commodity exporters were availing a MEIS (Merchandise Export from India Scheme) export incentive of 5% up to December last, Nagappan said, the same was reduced to 3% thereafter. “In the case of instant coffee, the export incentive was reduced to 5% from 7%. Also, the Centre has discontinued the MEIS scheme all of a sudden from April. Because of this, many shipments, for which prices were contracted earlier, were affected.” TNN