Tea Smuggling Under FATA/PATA Cover Causing Losses to National Exchequer: Aman Paracha and Muhammad Altaf

KARACHI :Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Vice President Aman Paracha and Chairman of the Pakistan Tea Association (PTA) Muhammad Altaf have announced their intention to challenge the government’s imposed Maximum Retail Price (MRP) on tea in court.

During a joint press conference at the Federation House in Karachi on Tuesday, they demanded the withdrawal of SRO 1735, claiming it has already caused a revenue loss of Rs. 40 billion to the national exchequer during the first nine months of the current fiscal year.

They stated that the imposition of Rs. 1,200 per kilogram MRP on tea in November 2024 has severely impacted the tea trade sector. They further argued that if the MRP is withdrawn, tea prices could drop by Rs. 200 to Rs. 300 per kilogram.

Addressing the media, Aman Paracha highlighted that tea is the second most consumed item in Pakistan after water, and therefore, it should be classified as a food item. He said the tea trade is currently facing a crisis, largely due to rampant smuggling.

“While smuggling has been significantly curtailed thanks to efforts by Army Chief General Asim Munir and Prime Minister Shahbaz Sharif, legal smuggling under the cover of FATA/PATA concessions has devastated the tea sector,” he noted.

Muhammad Altaf added that tea imports have declined by 17.5%, primarily due to misuse of tax exemptions granted to the FATA/PATA regions. He pointed out that while annual tea consumption in Pakistan is around 300,000 tons, imports during the past nine months totaled only 154,000 tons — compared to 190,000 tons in the same period last year.

The PTA Chairman accused customs authorities at the Faisalabad and Sargodha dry ports of clearing consignments at artificially low values without consulting the International Tea Price (ITP).

He demanded that no consignments be cleared without PTA’s ITP recommendations and emphasized that PTA members are currently paying nearly 70% in taxes.

FPCCI Vice President Paracha endorsed PTA’s position, stating that FATA/PATA import quotas, dry port facilities, and re-export mechanisms are being misused in the tea sector.

He called for the removal of all exemptions and the enforcement of a uniform tax regime, highlighting that small tea traders are struggling to compete due to these unfair practices.

“Tea imported at Rs. 800–900 per kilogram is being taxed based on the Rs. 1,200 MRP,” Paracha said, reiterating the demand for MRP withdrawal to reduce tea prices.

He also stressed that tea should be treated as a food item and raw material rather than a finished product, as it undergoes mixing, processing, and packaging.

Paracha disclosed that around 71,000 tons of tea have already been imported by taking advantage of various concessions and incentives.

“This injustice and oppression against tea importers must come to an end,” he stated.

He urged the government to support tea traders in keeping prices low and ensure the availability of good quality tea for the general public.