Govt to reinstate 20pc extra duty on tea import

February 23, 2014

The government is going to reintroduce 20 per cent supplementary duty on import of tea to protect local producers from uneven competition with imported ones, officials concerned said.
The National Board of Revenue has prepared a summery in this connection which will be sent to the finance minister for his approval soon, they said.NBR officials said that the revenue board made the decision following demand of the Bangladesh Tea Association and recommendation of the commerce ministry.
Currently, the importers have to pay 61 per cent duties on tea import. There are a total of 110 per cent duties on import of tea in neighbouring India, said the BTA.
The NBR withdrew the 20 per cent supplementary duty in the budget for the current financial year 2013-2014 which was imposed in the Finance Bill-2012.
According to the BTA, import of tea has increased manifold in 2013 due to withdrawal of supplementary duty and stood at 10.62 million kgs from 1.92 million kgs imported in 2012.
In a letter to the commerce ministry and the NBR, the BTA said the local tea producers were facing tough competition due to import of substandard and cheap tea from different countries taking the advantage of withdrawal of supplementary duty.
Local producers were not getting fair price as imported tea is cheap and a significant quantity of locally-produced tea remained unsold at every auction in Chittagong, it said.
The quantity of unsold tea crosses 30 per cent of total tea presented at auction, it said.
According to the BTA, Bangladesh annually produces around 62 million kgs of tea against the average internal demand for 56 million kgs.
According to Bangladesh Tea Board, there are 165 tea estates in the country situated in Moulvibazar, Sylhet, Habiganj, Chittagong, Rangamati, Brahmanbaria and Panchagarh. Of which, 91 tea gardens are situated in Moulvibazar, 22 in Habiganj, 19 in Sylhet, 22 in Chittagong, 9 in Panchagarh and one each in Rangamati and Brahmanbaria.
BTB data showed that though tea production had increased significantly in last four decades, tea export had been declining over the years mainly due to an increase of domestic consumption.
Bangladesh exported only 1.11 million kgs of tea in 2012 which was 18.10 million kgs in 2000.
BTA leaders said that the volume of export fell drastically mainly due to increase in domestic consumption.
In 2000, domestic consumption was only 35.05 million kgs of tea which stood at 56.80 million kgs in 2012, according to BTA statistics.

-With New Age input

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