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L.N. Revathy

COIMBATORE, Aug. 16

WHILE coffee prices at the global level have been ruling low, traders in Tamil Nadu have hiked the price of pure coffee powder at the retail end by Rs 5 a kg to Rs 125 a kg.

Traders attribute this increase to the State Government's move at levying `tax on trademark holder'.

Stating that such a levy was unheard off until now, coffee dealers in the State have appealed to the Tamil Nadu Government to consider exemption of coffee from the purview of this section — Section 3-J — introduced recently, in the TNGST Act, 1959.

Trade sources indicate the possibility of a further upward revision in retail prices in a couple of months if coffee was not exempted from this levy.

It may be recalled that the price of the coffee powder was revised downward thrice during the last fiscal, from Rs 160/kg to the Rs 120/kg level keeping in line with the global price fall.

Though the rates continue to rule low in the international market, the Tamil Nadu traders contend that the local industry has been hit hard owing to the tax on trademark holder.

Section 3-J states that a dealer holding a trademark or patent would be deemed to be the first seller of such goods, even if he was not the first seller in the

State. However, his tax liability would be reduced to the extent of the tax paid by him at the `immediate preceding point of sale'.

Mr S.V. Subramaniam, a trader, told Business Line that this levy would greatly affect the trade here, especially because Tamil Nadu was a major coffee-consuming State.

He pointed out that the coffee dealers were subjected to a single point sales tax at 8 per cent, over and above the four per cent tax levied at the point of sourcing raw coffee from the producing States of Kerala and Karnataka and a surcharge of 5 per cent.

The traders are pleading a sales tax reduction on par with Kerala.

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