According to Perfect Cardamom & Spices Marketing Co managing director, Mayur Desai, the tax structure of the state has left no other alternative but to end the cardamom auctioning in the city.

Besides the existing sales tax of four per cent and other levies like 0.8 per cent APMC cess, and a 0.2 per cent Navi Mumbai municipal cess, introduction of additional one per cent turnover tax and a 10 per cent surcharge on gross tax liability takes the total tax burden to 6.5 per cent. Interestingly, the cess mentioned above are not charged in other states.According to traders, the one per cent turnover tax is also absolutely impractical on high value commodities like cardamom and black pepper .This, say traders, is because the commission agents anddistributors help in distribution of merchandise on a narrow margin of 0.5 per cent to 1.00 per cent.

As authorised auctioneers, Perfect Cardamom for example cannot charge more than one per cent as commission to the planters because it would be contrary to the rules framed by the Spices Board (Under the union ministry of commerce).

The comparative tax structure in different states like Kerala, Tamil Nadu, Karnataka, Delhi dealing in cardamom and black pepper shows that there are wide differences in tax liabilities on the business and trade.

Kerala, Tamil Nadu and Karnataka have imposed a tax liability of four per cent.

Even further Delhi has imposed only a liability of as low as 2 per cent. Thus carrying on business in Maharashtra would become almost impossible.Moreover, the state government would also be the looser because either the traders would try to shift the business to other state were tax liability is low or indulge in tax- evasion.

It is common factor prevailing across the traders, tobuy goods in bulk and feel free in legal dealings if the tax structure is affordable and competitive compared to other states.

In a letter to the state finance minister, Desai has pointed out that as an auctioneer it would be hard for his company to cope with the tax liability and continuing efforts at this juncture would be fruitless.

The auctioneers have carried out 46 auctions up to date since the commencement on 23 October 97. He further pointed out that on a total turnover of Rs 6.63 crore, the state has accrued tax of Rs 30 lakhs in from the 46 auctions held at Navi Mumbai.

Desai has requested the minister to consider and rationalise the tax structure by lowering the sales tax to one per cent and reduction in APMC levy. He has also requested to do away with the turnover tax on high value merchandise like cardamom and pepper. He has stated that if the sales tax and cess are rationalised, particularly for the authorised auction centres of Spices Board, the revenue for the state will increase byleaps and bound.The cardamom and spices auction centre is the first of its kind set up in a centre other than producing centres. Though cardamom is grown in the souther state of the country and consumption is higher in the northern state. The auction centre at Navi Mumbai serves as a conduit between the southern and northern states, accruing substantial revenue to the state government.