Sector report: Tea and coffee
Key players
Tata Tata, Eveready, Nestle, Hindustan Lever, Assam Company, Harrison Malayalam, Goodricke Group, AFT Industries, Duncans Industries.
Tax structure
| Customs Duty (%) |
|
|
| Item |
1998-1999 |
1999-2000 |
| Tea |
15 |
16.5 |
| Coffee |
15 |
16.5 |
| |
|
| Excise Duty |
|
|
| Item |
1998-1999 |
1999-2000 |
| Bulk Tea |
— |
Rs 2 a kg |
| Packed tea |
8 % |
— |
Background
Tea
- Tea is on the negative list of imports. Importing tea requires a special licence.
- India accounts for 25 per cent of the world's tea production.
- Production of tea during April-November 1999 has fallen by 8 per cent compared to the corresponding period in the previous year.
- Exports of tea fell 10 per cent in 1999 due to reduced demand from United Arab Emirates and Russia.
Coffee
- Almost two-third of the coffee produced in India is exported as a result of which the coffee industry is significantly impacted by changes in global coffee prices.
- Coffee production increased by 12.7 per cent in April-November 1999 compared to the corresponding period of the previous year.
Expectations from the Budget
- The United Planters Association of South India has called for the exemption of the tea industry from excise duty.
- The association has further demanded that import duty on tea be raised to protect the domestic tea industry.
- Indian Tea Association has demanded a higher level of marketing support and interest free loans from the Brand Equity Fund for promoting consumption of Indian tea abroad.
ALSO SEE:
What will Yashwant Sinha do?
How will personal taxes change?
Fiscal report card
SECTOR ANALYSIS:
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