In order to help local trade in the high value spice, the Kerala government has been asked by Spices Board to reduce VAT on cardamom trade from 5% to 2% to make it comparable to the rates existing in other states, including neighbouring Tamil Nadu.
An alliance of the tax rate of Kerala and Tamil Nadu and implementation of VAT at the rate of 2% will facilitate flourishing of cardamom business in Kerala. The alliance would also facilitate entry of more local dealers from Kerala to the small cardamom trade further motivating forward integration to the trade.
The Spices Board Chairman, A Jayathilak was delegated to issue more small cardamom dealer licenses to improve bidding participation in e-auction. The presence of inter-state buyers had been a feature of small cardamom business. The cumulative effect would result in greater revival in prices to the growers due to increased demand from more bidders in the e-auction.