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February 8, 1999
Packaged tea segment reels under excise duty, seeks relief in Budget
Data compiled by Operations Research Group for the month of December 1998 states that the packaged tea market size has dropped further by 8.3 per cent. The levy of the excise duty on packaged tea imposed in June 1998 has led to the decline in the branded tea market for the period July to December 1998.
The Tea Packeters Association of India, the apex body of the Indian manufacturers of packaged tea, has petitioned the Union finance ministry to withdraw the eight per cent excise duty on branded packaged tea in the Budget.
Since tea is an item of mass consumption across all socio-economic classes, the excise duty has affected consumers across all income strata, it said.
Data published by the Indian Readership Survey debunks the contention that only affluent households consume branded packaged tea. The IRS has found that packet tea is used by as many as 45.3 per cent of households with a monthly income of less than Rs 3000 and 69.4 per cent of households with a monthly income between Rs 3000 and Rs 5000.
The survey also found that nearly half (46.3 per cent) of the rural households also consume branded packet tea. The excise duty had a negative impact on the mass consumption of packaged tea. Reversal of the duty will definitely help ease the burden of the inflation that the common man is already reeling under, the TPAI said.
It further said that low-cost loose tea, that is being increasingly bought by people , has been found to be adulterated more often than not. Packaged tea is consistent in quality, unadulterated and hygienic and helps to retain the freshness of the product. Hence the government must help the sector in the overall interest of the health of the people, it pointed out.
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