The Hindu Business Line : AP tea traders seek cut in tax rate

COSTLY CUPPA: A worker manning a tea vending machine in Hyderabad on Tuesday. Under the proposed VAT regime, tea has been placed in the tax bracket of 12.5 per cent in Andhra Pradesh, which will push up prices. - A. Roy Chowdhury

Hyderabad , Feb. 22

THE Andhra Pradesh Tea Merchants Association urged the State Government to put tea under the 4 per cent tax category in the ensuing VAT regime, on par with the tax rates proposed to be imposed in tea producing States such as Assam and Tamil Nadu.

Addressing a press conference here on Tuesday, the office bearers of the association said that the empowered committee on VAT had given the option to the State Governments to impose either 4 per cent or 12.5 per cent VAT on various products.

The AP Government, without considering the consequences, had put tea under 12.5 per cent category. They deplored that such a vast difference in the VAT between AP and Tamil Nadu would lead to "smuggling and diversion of wholesale tea trade".

AP accounts for the sale of 50 lakh kg of tea per month worth about Rs 30 crore. The sales tax rate on tea in the State at present is 10 per cent.

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