Tea prices to go up from April

With the recent hike in value added tax (VAT) on tea and other food items by the Maharashtra government from 4 per cent to 5 per cent, tea prices will rise further from April 1 this year.

“If 12.5 per cent VAT comes into effect from April 1 this year, tea prices would rise by Rs 20-30 per kg. It would be too harsh for the common man at large at a time when the central government is struggling to bring down food inflation. The lower and medium quality tea priced at Rs 180-200 per kg at present would shoot up to Rs 200-220 per kg,” said Harendra Shah, president of Federation of Tea Traders Association of Maharashtra and chairman of Federation of All India Tea Traders Association.

“Similarly, the premium tea priced at Rs 300-320 per kg presently would go up to Rs 325-350 per kg as well,” Shah said. Tea would cease to be part of Schedule-C from April 1 2010, and would fall under residue head and attract 12.5 per cent VAT from next moth onwards. The association has called for a uniform VAT rate on tea across India, seeking an appropriate announcement in the Maharashtra government’s Budget, whereby the lowest rate of VAT will continue on all essential items of daily consumption till such time that the GST would be implemented. The association has already sent a memorandum to the Finance Minister of the State, the Empowered Committee of Finance Ministers on VAT, the Tea Board and Navi Mumbai Chamber of Commerce.

Source: Indian Express