TAI president Arvind Newar said while the tea plantation industry has welcomed the eight per cent excise exemption, it is disappointed by the additional levy on bulk tea.

Newar said in a year when prices of essential commodities like foodgrains increased by more than 25 per cent, tea prices did not affect the common man at all. "In fact, the prevailing average tea price is Rs 71.89 per kg, which when put in accordance to wholesale price index should have been Rs 84.56 per kg. This effectively means a shortfall of Rs 12.67 for each kg of tea," the TAI chief said.

Newar warned that the social cost of decelerating development in the tea industry would bemuch higher than the excise revenue collection. Tea would have to be imported to meet the shortfall, leading to a net outflow of foreign exchange.

He stated that the pre-1993 excise duty rates were Rs 1.50 and 0.50 per kg on quality and non-quality teas. The differing rates were levied on the basis of paying capacities of the regions. Now the flat rate of Rs 2 per kg will prove to be too heavy for the entire tea industry. TAI has urged the Government to totally withdraw the Rs 2 per kg excise on bulk tea.

The non-imposition of excise on tea of any kind was warranted by the fact that it is a poor man's drink, the TAI president said.