Tea importers demand withdrawal of Rs1,200/kg MRP

KCCI, PTA warn policy will burden consumers, hurt legitimate traders

KARACHI:

In response to concerns raised by the Pakistan Tea Association (PTA) over the fixation of a Minimum Retail Price (MRP) of Rs1,200 per kg for black tea imports, Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani has urged the government to withdraw this "unjust regulation" immediately.

He said the measure penalises legitimate importers by forcing them to pay higher taxes and makes tea unaffordable for the poor. "Setting the MRP at a flat rate per kilogram will disproportionately impact low-income groups in urban and rural areas, equating their burden with higher-income groups. This will strain lower and lower-middle-class households already struggling with inflation," he said while addressing a PTA delegation during their visit to the KCCI.

Bilwani explained that applying a flat rate to all imported tea ignores its cost variability. For instance, tea imported at $0.80 per kg would still be taxed at Rs1,200/kg, raising prices and making affordable tea inaccessible. He noted that black tea is imported at costs ranging from $0.80 to $4.50 per kg.

He further highlighted the disparity caused by exemptions granted to Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA), along with tax evasion through dry port misuse. "During 2023-24, 23 million kilograms of tea were imported under FATA/PATA exemptions, yet 20 million kilograms were sold nationwide, depriving the national exchequer of Rs25 billion annually," he said.

PTA Chairman Muhammad Altaf also opposed the Federal Board of Revenue's decision to enforce the Rs1,200/kg MRP. "Tea is imported in bulk, ranging from 5 to 80 kilograms per bag, and undergoes further processing before reaching consumers. It should be treated as raw material, with sales tax based on import value under the Sales Tax Act 1990, not MRP," he said.

Altaf warned that the policy could raise tea prices by Rs150 to Rs300 per kg, reducing affordability.