The country’s tea growers have demanded duty increase on import of tea by more than 25 percentage points to protect the local producers from ‘uneven competition’ with the imported one. The Bangladesh Tea Association earlier this month placed its demand to the finance and commerce ministries and the National Board of Revenue seeking an increase of total duty on tea import to 110 per cent from the existing 84 per cent.
The duty level should be kept consistent with that of neighbouring tea producing countries like India and Sri Lanka to discourage import, it said.
In India, the rate of duty on import of tea is 110 per cent while that is 130 per cent in Sri Lanka.
In a letter signed by BTA chairman Ardashir Kabir sent to NBR chairman Md Nojibur Rahman, the association claimed that local tea growers were facing uneven and tough competition with the importers due to low duty on its import.
The quality of imported tea is also substandard, it claimed.
According to the BTA, tea import has been increasing since 2010 and 4.13 million kg of the item was imported in the country in that year.
In 2012, the tea import fell sharply to 1.92 million kg as a result of imposition of 20 per cent supplementary duty on it in the financial year 2012-2013.
The import of tea again skyrocketed to 10.62 million kg in 2013 due to the withdrawal of the supplementary duty.
In April 2014, the revenue board increased regulatory duty to 15 per cent from 5 per cent in line with the repeated demand from the tea growers and its import fell down to 6.96 million kg in the year.
The BTA claimed that local producers were losing the market and not getting fair prices as imported tea was cheaper.
‘The price of tea fell down in the auction in Chittagong in the current financial year 2014-2015 due to excessive import of the item making the local growers worried about the future of the industry and their investment,’ Ardashir said in the letter to the NBR.
In January, the average auction price fell down to Tk 188.10 a kg from that of Tk 201.55 a kg in May last year, he said.
He said in many cases, the price of imported tea stood at Tk 144 a kg which is even lower than production cost of locally-produced tea.
In addition, around 25 per cent to 30 per cent tea remained unsold at every auction and the volume of unsold tea is on the rise, he added.
‘In this context, duty on tea import should be increased to save the local industry and discourage the import of low-quality item as the local growers are fully capable of meeting the domestic demand for it,’ he said.
According to the Bangladesh Tea Board, Bangladesh produces 66.26 million kg of tea in 165 tea estates in 2013 against the average internal consumption of 64 million kg in the year.
Production and domestic consumption of tea have been increasing significantly over the years.
According to BTB data, the country’s tea production was only 18.36 million kg against the internal demand for 14.21 million kg.
-With New Age input
