PTA and KCCI demand action on irregularities in tea imports
The Pakistan Tea Association (PTA) and the Karachi Chamber of Commerce and Industry (KCCI) have also asked that the government address other irregularities in tea imports and stop abusing tax exemptions.
The Federal Board of Revenue was encouraged to take notice of the widespread misuse of tax exemptions in Azad Kashmir and the Federally Administered Tribal Areas/Provincially Administered Tribal Areas by KCCI Senior Vice President Altaf A. Ghaffar in a statement released on Thursday. According to him, this misuse has resulted in a significant loss of income and is driving away commercial importers of black tea, a significant source of income.
The FBR loses a lot of money because, as Ghaffar pointed out, commercial importers of black tea pay outrageous taxes and duties of up to 53%, while importers from Azad Kashmir and the FATA/PATA regions only pay 15% to 19%. As a result, approximately 75% of black tea imports are diverted to exempt areas, far exceeding the actual consumption of the tea, and the majority of this tea is sold throughout Pakistan.
He added that importers of black tea in Azad Kashmir and FATA/PATA pay Rs1.65 million in taxes and duties per container, while those in other regions pay Rs6.21 million. This huge difference unfairly penalizes Pakistan’s non-exempt importers, costing an extra Rs4.56 million for every 20-foot container of black tea. Ghaffar emphasized that these activities have resulted in a substantial loss in sales for authorized black tea importers over the past few years.
He went on to say that the only purpose of the black tea that Azad Kashmir and the FATA/PATA zones, which have tax exemptions, import, was to be sold in these regions. But because it’s being sold all throughout the country, importers of black tea, who make about Rs 3.5 billion a year, are suffering greatly.
The Senior Vice President of KCCI made a demand to address the problems encountered by tea importers: the tax exemptions must terminate by the end of the current fiscal year, and no more extensions would be given after June 2024. He said that this action would create equal playing fields.
Senior Vice Chairman of the Pakistan Tea Association (PTA), Khalil Paracha, emphasized in an interview with The Express Tribune the necessity of ending the abuse of exempted charges and doing away with the Maximum Retail Price (MRP) tariff levied on tea imports. When tea is imported in large quantities, Paracha drew attention to the inconsistency of applying MRP duty at the final product stage. He called for the elimination of the MRP duty at all pertinent venues, such as the ministry, federation, and association, voicing concerns on behalf of the whole industry, which includes importers, traders, and packers.
I am a dedicated student currently in my seventh semester, pursuing a degree in International Relations. Alongside my academic pursuits, I am actively engaged in the professional field as a content writer at the Rangeinn website.
