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Budget 2003: Industry seeks
roll back of Additional Excise Duty
The
Indian Tea Association, in its letters submitted recently
to the Government of India, has appealed for roll back of
the new levy of Additional Excise Duty which continues to
burden an already crisis-ridden industry at a time when
it has been seeking a complete abolition of Excise Duty.
The letters, dated March 11, have been sent to the Finance
Minister, Mr. Jaswant Singh, Commerce and Industry Minister,
Mr. Arun Jaitley and Additional Secretary, Ministry of Commerce,
Mr. L. V. Saptharishi.
In the recent Budget address a reference was made by Mr.
Jaswant Singh to the fact that the tea plantation sector
has been passing through a continued severe financial crisis.
As a measure of relief to the ailing industry, the Budget
proposed abolishing the Central Excise Duty of Re 1 per
kg. While the Excise Duty was withdrawn, it was replaced
by a Surcharge — by way of Additional Excise Duty
— of Re 1 per kg towards creating a separate fund
for development, modernisation and rehabilitation of plantations.
The ITA is disappointed at the levy of the Additional Excise
Duty at this moment of crisis.
The letter said: “It has been well acknowledged that
Excise Duty emerges as an element of cost which the industry
is unable to pass on to the subsequent stage of the value
chain. The new Additional Excise Duty imposed in the Finance
Bill 2003 effectively continues the earlier burden denying
any relief whatsoever. Furthermore, the industry perceives
no utility in the initial parking of funds which will delay
the process of development and modernisation and involve
unnecessary bureaucratic control.”
The letter further states that while the Budget proposal
has a laudable intent in reserving the collections from
this new Additional Excise Duty to create a separate development
fund for the tea plantation sector, the Association is aggrieved
that this is sought to be created at the expense of an industry
that continues to suffer from acute recessionary conditions.
“Large number of tea estates are unable to maintain
economic viability which is threatening the livelihood of
millions of plantation workers and their dependents. Many
tea estates in North and South India have been closed or
have suspended operations. Furthermore, creating a separate
fund may be tantamount to penalising efficientunits because
an estate bearing this levy may not have full lien over
the contribution
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made,” the letter stated.
Hence, the Association has urged the Finance Minister
to withdraw the new levy of Additional Excise Duty.
Tea
Marketing Control Order 2003
The
Tea Marketing Control Order 2003, dated 1 January, was
issued recently by the Ministry of Commerce, Government
of India. The Order, issued in supercession of TMCO, 1984
incorporates several fresh features which are expected
to go a long way in —
- imparting
a greater degree of balance within the various constituents
of the tea trade
- ensuring
adherence to fair trading practices in general and reinforcing
the credentials of the public auction system
- ensuring
adherence to quality standards in regard to manufacture
and sale of tea
-
fostering improved and regular market information on the
quality, type and price profiles of tea manufactured and
sold
The CCPA,
at a meeting with its members appreciated the new features
saying they should bring in greater transparency and accountability
in tea trade. They would also contribute to more effective
and informed decision making on the part of all the
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