The tea industry in south India has urged the finance and commerce ministries to review the levy of 8 per cent excise duty on packaged tea announced in the recent Union Budget.Industry sources confirmed that the representatives of the southern tea industry would hold talks with top officials of commerce and finance ministries on the vexed issue.Meanwhile, the excise department in Coimbatore has decided to strictly follow the rule book in imposing the levy. In the absence of any clarification from the government with regard to the scope of levy, the department officials are of the view that duty should be paid on all clearances, senior industry sources said.However, an agitated and confused planting community is considering suspension of all despatches ``till the matter is solved'', if the excise department goes ahead and imposes the levy. An immediate fallout of the decision, if implemented, would be non-availability of the popular commodity as auctions would come to a standstill.Both the TeaTrade Association of Coimbatore and the United Planters' Association of Southern India have written separately to the prime minister and the commerce and finance ministers. ``The introduction of the high excise duty will be detrimental to the efforts of the industry and trade to make available value-added tea,'' Upasi stated in its letter seeking a withdrawal of the levy.The bone of contention is the interpretation of the levy which the excise department feels not only includes packet teas but also bulk tea packed in containers like tea chests, jute bags or in any other manner if the container carries a logo or the estate name. The tea is taken to the auction centres with estate names.``The definition of brand name would mean any quantity packed and containing a mark or symbol. If all teas are levied 8 per cent then the commodity will be too expensive. Moreover, the price in the case of bulk teas is known only when hammered at the auction. The costs will also vary, which may not be acceptable to theexcise officials,'' said BR Bhansali, executive director of Kalasa Tea & Produce Company Ltd.However, there are also interpretations that the decades-old practice of restricting the quantity to 21 kg bag, as a criterion to enter an auction centre, could be followed. ``There are no hard and fast rule that only higher quantities can enter the auctions. But it'll not be economical for the seller to pack in small bags,'' said Bhansali. Around 35-40 per cent of the tea production is sold in packets and the rest in bulk form. ``The rural areas will be hit hard by the levy if it's on packet teas.
