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Tea Association

Duty, tax exemption on tea export grossly misused: PTA

KARACHI: Pakistan Tea Association (PTA) on Saturday pointed out gross misuse of duty and tax exemption granted on tea re-export by importers of tea as raw material.

The office bearers of the association pointed out the SRO 450 which is meant for re export of tea after value addition, the importers who have exemption of this particular SRO, this is observed they are misusing this exemption and selling teas to various cities across country without any documents.

Though the teas imported meant for re-export, these teas are imported at zero rated duties and taxes ,this is noticed these teas are not even going to specific warehouses and cities, these malpractices causing huge loss to revenue and discouraging the importers who are paying full duties, they added.

PTA office bearers Muhammad Aman Paracha, Chairman and Zeeshan Maqsood, Sr. Vice Chairman and Convener, FPCCI Standing Committee on Tea Trade on the occasion expressed their views that tea is common men drink and shall be treated essential and common men drink rather than luxury, tea is the only traditional product being consumed by elite class & poor people.

Revised duties and taxes are suggested for the upcoming federal budget 2021/2022: “Custom Duty 5 percent, sales tax 7 percent, withholding tax 2 percent and additional customs duty at 0 percent.”

Chairman said that the tea is a raw imported from various countries blended and processed and available to the end users. Therefore, this shall be treated as raw material rather giving incentives to selected importers.

Besides, tea importers are also paying 30 percent value addition at port stage as a retail/end user tax on the basis of minimum retail price.

In light of above it is requested that fool proof system shall be adopted by the relevant authorities of Federal Board of Revenue (FBR) and shall be strictly monitored, whether teas are going to their respective registered cities/areas? And re exported as per directions in this specific SRO.

PTA representatives showed fear if the options/exemptions highlighted above will be continued than legitimate business will come to halt & everyone will try to get such exemptions, this could be serious threat to state revenue & revenue loss will start escalating.

Further few importers successfully obtained various tax exemptions for PATA/FATA & Azad Kashmir etc which is also being misused, this is observed that teas imported under said exemptions are also going to other cities rather than to specific areas, this must be monitored strictly as well.