Govt set to re-introduce 20pc SD on tea import

The government is set to re-introduce 20 per cent Supplementary Duty (SD) on import of tea, which had been scrapped in the budget for the current fiscal year.
The National Board of Revenue (NBR) recently took the move following a Bangladesh Tea Association (BTA) proposal.
The move sparked mixed reaction among the tea producers and packagers.
Industry insiders said ensuring quality tea is necessary for betterment of the industry.
"Excessive protection of local tea industry makes the insiders reluctant on ensuring the quality," said an industry insider.
Quality tea is always high in demand and cannot remain unsold in auction, he said.
Currently, tax incidence on import of tea is 61 per cent including 25 per cent customs Duty (CD), 15 per cent Value Added Tax (VAT), 4.0 per cent Advance Trade VAT (ATV), 3.0 per cent Advance Income Tax (AIT).
Industry sources said around 66 per cent of local tea remained unsold in a recent auction due to availability of imported tea. Bangladesh Tea Association (BTA) president Safwan Chowdhury said locally produced tea remained unsold in the auction.
"Prices of locally produced tea went down below the production cost as cheap and substandard tea is entering the country," he said. Another industry source said entry of smuggled tea has increased manifold with the higher import duty and demand for quality tea in the local market.
They said "bad practices and lack of proper care of tea plants" is the major reason to deteriorating quality of locally produced tea.
With the demand of quality tea, tea import increased nearly ten times in a year, they added.
Import of tea increased to 10.62 million kilogram (KG) in 2013 from 1.92 million kg in 2012.
According to BTA, Bangladesh annually produces around 62 million kgs of tea against the average internal demand of 56 million kgs of tea.