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Maharashtra hikes VAT for tea to 12.5%
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Saturday, 15 April, 2006, 08 : 00 AM [IST]
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ociation observed a day's strike on April 11 to protest against the state
government's decision to charge VAT for tea at 12.5% against the present levy of 4%. According to industry sources no notification was given to the traders over the upward revision in VAT rates for tea. State Finance Minister Jayant Patel, in his budget speech, had indicated that tea would come under Schedule C and the VAT levied on it would be 4%. The confusion began on April 1when the VAT on tea was revised to 12.5% from the existing 4%. In fact, all other states except Andhra Pradesh charge 4% VAT on tea. If 12.5% VAT is implemented, prices will go up by Rs 10-12 per kg
It is feared that the tea business would shift to neighbouring states and deprive lakhs of people of employment. In addition, major players like HLL, Tata Tea and other multinational companies will find it difficult to sell packaged tea due to the difference in VAT rates.
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