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Panel moots higher excise on packed tea

KOCHI: The O. P. Arya Committee that looked into social infrastructure in tea plantation areas has recommended a Re. 1 excise duty on packed tea meant for domestic sale, to raise Rs. 30-35 crore a year and thus subsidise social infrastructure development in these areas.

“The Committee feels that for subsidising the medical, health, drinking water and education, funds may be mobilised by imposing additional excise duty of Re. 1 a kg on packet tea,” said the report submitted to the Union Commerce Ministry recently. The duty would be levied only on tea that is not exported, the report said. The money raised from the proposed duty will be available to the Tea Board for utilisation in subsidising social infrastructure.

As per the Plantation Labour Act (1951), the onus is on plantation owners to provide health, education, housing and drinking water facilities to the workers. The Committee observed, “There are chances that the industry, which has been in a crisis in the recent past, may further become uncompetitive if it continues to bear the cost of social benefits fully.”

The new excise levy has been recommended under these circumstances. The Committee report also said that although the Plantation Labour Act was a Central government legislation, its implementation was left to the State governments. Therefore, “A proper balance and uniformity, to the extent possible, need to be ensured in the implementation of the Act.”

More than a million people pin their hopes on the success of the tea industry. The need for social infrastructure is acute in tea growing areas, especially considering that more than 50 per cent of the workforce in the Indian tea industry comprises women.

India produces about 950 million kg of tea a year. As per the estimates of the Inter-Ministerial Committee set up by the Ministry of Labour and Employment, the social sector cost component alone works out to Rs. 7.2 a kg of tea made. Coupled with the rising cost of social infrastructure, the industry has been facing a fall in prices. This has forced the plantations to call for a rationalisation of the provisions in the Plantation Labour Act.

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