KARACHI: The Federal Board of Revenue’s (FBR) decision to fix the minimum retail price (MRP) of tea at Rs1,200 per kg for levying sales tax would make the commodity more expensive, warned traders on Tuesday.

Pakistan Tea Association (PTA) Chairman Mohammad Altaf said the MRP at the import stage would have an adverse impact of Rs150-300 per kg on imported tea prices.

The flat MRP also ignores global tea prices hovering between 0.50 cents to over $3 per kg. Tea is imported in different packaging, with bulk shipments typically weighing more than 5kgs and around/approximately 80kgs. An 18 per cent general sales tax is already charged based on the imported tea.

He said before fixing the MRP for sales tax purposes, it is crucial to consider that the definition of “manufacturer” in Section 2(16) of the Sales Tax Act 1990, includes activities such as blending, mixing, processing, and packaging, as clarified in Circular No. 3(11) ST-L&P/2013-94433-R dated July 17, 2019. Based on this, tea imported for these processes qualifies as “raw material”.

Tea sellers warn FBR move will incentivise arrival of low-quality product via illegal channels

“According to judicial interpretations (e.g., CTO v. Rajasthan Taxchem Ltd., 2007) and definitions in Advanced Law Lexicon, “raw material” includes ingredients necessary for manufacturing. Tea used in blending and packaging clearly falls under this category, he added.

Accordingly, sales tax should be based on the import value, as per Subsection 46(f) of Section 2 of the Sales Tax Act, 1990, rather than the minimum retail price, Altaf said.

Tea retail prices vary significantly due to numerous factors, including the company, method of sale (open or packaged), product quality, and regional differences. The PTA chief said that the flat MRP rate per kg also does not reflect the prices charged by most traders, manufacturers, and sellers.

The imposition of a flat rate per kg would have severe negative consequences for a large portion of the tea trade, which may result in reduced business activity and ultimately lead to a loss of revenue for the national exchequer via misusing several exemptions.

Two-thirds of Pakista­nis purchase tea at Rs700-950 per kg, reflecting socio-economic and regional price variations.

He said that MRP cannot be applied at the import stage as the tea has to follow various value-addition procedures before it is made shelf-ready. “This MRP disrupts the supply chain and eradicates the role of wholesalers and distributors who play a vital role in the business, while MRP at the import stage also eradicates the basic right of commercial imports,” the PTA chief observed.

Tea is a part of our daily diet, a staple food item, not a drink.

Most people in rural and urban areas consume tea as per their earnings. Further fixing of MRP will incentivise unscrupulous elements to exploit the situation, and thus, import of low-priced teas will find its way through illegal channels, Altaf feared.

Published in Dawn, November 13th, 2024

ISLAMABAD: The National Database and Registration Authority (Nadra) chief has told a National Assembly panel that the fees for identity cards will have to be increased if it opens up more offices.

In a briefing to the National Assembly’s Standing Committee on Interior on Tuesday, Nadra Chairman Lt General Munir Afsar said the authority has no office in 61 tehsils of Khyber Pakhtunkhwa and Balochistan.

The committee, which met for the second consecutive day with Raja Khurram Nawaz in the chair, was told that 26 National Registration Centres (NRCs) and three mega NRCs were currently operational in Karachi.

The authority is planning to open one more NRC and four mega NRCs in Karachi next year.

Chairman tells NA body six employees were sacked over data breaches

While talking about the security of Nadra’s infrastructure, Lt Gen Afsar said the agency monitors three to four hundred individuals daily to detect data leaks and unauthorised identity card issuances.

He said six Nadra employees, including a grade-19 officer, have been dismissed over their alleged involvement in a data breach.

The breach compromised the data of around 2.7 million citizens between 2019 and 2023.

A joint investigation team formed to probe the data leak in March submitted a report to the Interior Ministry revealing that Nadra officers in Karachi, Multan and Peshawar were involved in the data theft.

The NA committee was informed that Nadra had dismissed 202 hired and 60 officers during the last five years.

The authority’s revenue has increased from Rs23.55billion in 2019-20 to Rs57bn in 2023-24.

FIA DG briefs committee

The Federal Investigation Agency (FIA) director general, Ahmad Ishaque Jehangir, briefed the committee about human smuggling networks recently uncovered by his organisation.

He said smugglers in Lahore, Rawalpindi and Karachi lure people with the prospects of overseas employment.

He said the agency was probing the case further, and the investigation is expected to conclude in six to seven months as this is a cross-border crime, and additional information is required from law enforcement agencies in Romania.

An additional inspector general (AIG) of Punjab police briefed the participants on rape cases involving minors reported in the province over the past five years.

From 2020 to 2024, 8,306 such cases were registered, with 6,950 accused arrested. Of these, 299 were convicted, 1,736 acquitted, 1,088 discharged, and 3,827 cases were still under trial, the lawmakers were told.

The committee also discussed the new “Criminal Law (Amendment) Bill, 2024 and directed the ministry to include a clause permitting the filing of an FIR against Discos and employees responsible for overbilling.

The members said that electricity usage and theft slabs should be specified in the bill and that the proposed law should differentiate between residential, commercial, and industrial users.

Published in Dawn, November 13th, 2024

Tremors were felt in various cities of Khyber Pakhtunkhwa as well as Islamabad on Wednesday after a quake jolted Afghanistan’s Badakhshan region.

According to the United States Geological Survey (USGS), the earthquake had a magnitude of 5.1, while the Pakistan Meteorological Department (PMD) reported it as having a 5.3 magnitude.

The USGS said the quake’s centre was located 37 kilometres west-southwest of Afghanistan’s Ishkashim town and had a 220.7km depth.

The earthquake struck at 10:13am (Pakistan time), both the USGS and PMD confirmed.

No casualties have been reported so far.

DawnNewsTV reported that the tremors were felt in Peshawar and its adjoining areas, as well as Islamabad.

Speaking to DawnNewsTV, two correspondents based in the cities said the quake caused people to evacuate buildings.

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