KOLLAM: Cashew sector has welcomed the provisions for the sector in the State Budget.

An allocation of Rs.30 crore to the Kerala State Cashew Development Corporation (KSCDC) and the Cashew Workers Apex Industrial Cooperative Society (Capex) for clearing bank liabilities has been made in the budget.

In addition, Rs.8 crore has been allotted for improving the performance of the KSCDC and Capex. For the purpose of strengthening the performance of the Cashew Special Office in Kollam, Rs.50 lakh has been allocated. The aim of this allocation is to establish a Cashew Board Office in Kollam. The board has to be constituted by the Centre.

The concession announced regarding a commercial taxes dispute faced by the private sector has been hailed.

Following detection of huge quantities of defective F-form cashew sales in Kollam, the Commercial Taxes Department slapped a huge amount as tax, penalty and interest on the evaders.

Cashew processors and exporters complained that paying up such an amount would spell doom for the industry. Their demand was that the 12.5 per cent Value Added Tax (VAT) should be brought down to four per cent and for that their delegations met the ministers concerned and even Chief Minister V.S. Achuthanandan.

In the Budget, the Finance Minister stated that a concession was being made following representations from trade union leaders and other delegations and in the larger interest of cashew workers.

As per the concession, the evaders will have to pay four per cent tax plus interest and clear the dues by June 30, 2007. If agreeable, tax, fine and the interest computed for the period prior to March 31, 2006, will be dropped.

Minister for Cashew Industry P.K. Gurudasan welcomed the announcement. He told The Hindu that the private sector should definitely be happy.

Banks' attitude

On the allocation for clearing bank liabilities, the Minister said that the banks were not adopting a helpful attitude towards the KSCDC and Capex. Though a good amount of the liabilities was cleared last year too, the banks failed to advance packing credit loans. As a result, the Government had to make an additional allocation as working capital for the KSCDC.

The Cashew Manufacturers and Exporters Association said that the decision came as a major relief to the industry. "It will save the industry from a major crisis," an office-bearer of the association said.

In the wake of the concessions, the association hoped that all revenue recovery proceeding initiated against cashew processors would be stopped.

The association expressed concern over VAT of 12.5 per cent on domestic sales of cashew.

CITU leader J. Mercykutty welcomed the provisions in the budget for the KSCDC and Capex. She said the demand for a suitable allocation to clear the gratuity liabilities of cashew workers did not find place in the budget.

Gratuity since 1998 had to be cleared and at least Rs.8 crore was needed for the purpose.

Chairman of the KSCDC E. Kazim echoed Ms. Mercykutty's concern.

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