TDS on cash withdrawal to compromise the liquidity of tea estates


The announcement of imposing 2% TDS on cash withdrawal exceeding Rs 1 crore in a year from a bank account in the Union Budget will compromise the liquidity of tea estates. The Indian Tea Association in a release issued on Friday said that in the absence of adequate banking infrastructure in tea garden areas and lack of access to banks for tea garden workers, the tea garden management is required to pay workers wages in cash.

In this backdrop, a 2% TDS on cash withdrawals of over Rs 1 crore in a year will compromise the liquidity of tea estates and cast an additional burden on the industry. ITA has appealed to the government to exempt the tea industry from this provision till such time the bank accounts of tea garden workers are made operational.

In the release ITA said that the he thrust on social welfare schemes in the budget is a welcome step. It is expected that tea estate population would be provided a more comprehensive coverage on schemes related to housing, education, sanitation, medical facilities etc.


The release added “In the budget it has been announced that multiple labour laws would be streamlined into a set of four Labour Codes. The wage package for the tea sector is a combination of cash and in-kind benefits like housing, sanitation, fuel, education, medical facilities, water supply etc. The Code on wages has proposed a national minimum wage. We would urge that due recognition is given to the in-kind benefits being provided by the management to the tea garden workers and their families and such in-kind benefits are included as part of wage.”

Tea industry provides direct employment to over 1.2 million workmen. In keeping with the thrust on employment growth, labour intensive industries like tea need to be adequately incentivized to protect and grow the large employment base.

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