Proposed MRP fixation: PTA expresses strong reservations

KARACHI: The Pakistan Tea Association (PTA) has expressed strong reservations against the Federal Board of Revenue’s proposal to fix a minimum retail price (MRP) for tea, citing concerns over its impact on the industry and consumers.

In a letter to the authorities, the PTA argued that fixing the MRP at a flat rate per kilogram would disrupt the supply chain, eradicate the role of wholesalers and distributors, and unfairly burden lower-income brackets. “The proposed MRP fixation lacks a rational basis and disregards the nature of the tea trade,” said a PTA spokesperson.

“Tea retail prices vary significantly due to factors like company, product quality, and regional differences.” The association emphasized that tea imported for blending, mixing, and packaging should be treated as raw material, with sales tax based on import value rather than MRP.

The PTA also highlighted the potential for exploitation, stating that fixing MRP would incentivize unscrupulous elements to import low-priced teas through illegal channels.

Instead, the association urged the government to remove exemptions (FATA/PATA, Re-Export/ERS) to increase revenue. The FBR’s proposal is part of efforts to implement SRO 1735(1)/2024, notification regarding the fixation of MRP for tea under the Sales Tax Act, 1990. The PTA has requested a meeting with authorities to discuss their concerns in detail.

Copyright Business Recorder, 2024