New Delhi: Imagine the government asking Coca-Cola to reveal its secret formula while filing tax returns!

India's tea exporters feel this is what the goods and services tax (GST) regime is compelling them to do by seeking the identity of each supplier in the shipping bill, which is tantamount to revealing the unique composition of the blends.

The GST requirement applies to tea exporters who wish to seek tax concessions. The South India Tea Exporters' Association (SITEA) has described the condition as "impossible and impractical", given the nature of the tea trade that involves procurement through public auctions from multiple sellers and subsequent blending for exports.

"We've met the (GST) commissioner in Chennai and pointed out that asking for details of blends from exporters is like asking for Coca-Cola's formula," said Dipak Shah, chairman of the SITEA.

India is the world's second largest tea producer with an annual production of about 1,200 million kg of which over 230 million kg go into exports.

Over 70 per cent of tea procured by exporters in India comes through tea auctions offered by brokers to the trade through an electronic public auction platform managed by the Tea Board. An exporter may procure tea from multiple gardens, at times from 30 to 40 sellers, and create blends for specific export markets.

"Since teas from 30 to 40 different tax invoices may make a blend which is exported, how can such details be incorporated in the shipping bill?" the SITEA has asked in a note sent to the GST commissioner in Chennai.

Shah said combining multiple teas into a blend was a skilled art intended to maintain the uniform quality and taste of a blend and overcome season-to-season variations in teas from different gardens.

The government's notification 41/2017 on GST says an exporter should provide a copy of the procurement order against each registered supplier for procuring goods at the concession tax rate applicable to exporters.

But the SITEA has pointed out that exporters are not in a position to furnish prior procurement orders as the teas are bought through an electronic auction. "Should our bids on the electronic auction platform be treated as a prior order? There is no clarity in this, there is a lot of confusion," Shah said.

Bharat Arya, the chairman of the Federation of All India Tea Traders Association in Calcutta, said: "The GST regime is extremely complicated, it needs to be simplified and made user-friendly."

Tea traders are also unhappy about poor mechanisms for refunds on GST paid since July 2017.

"Since there is no proper mechanism for refunds, the government has given some relaxation through manual refunds. But applications have to be manually filled with supporting papers to the departments concerned for verification before refunds. They are pushing the tea trade into an inspector raj," Shah said.