Protests brewing over undue ‘Karak Tea’ price hike in Bahrain

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

The Ministry of Industry, Commerce and Tourism yesterday took quick actions against a tea shop, which took undue advantage of the Value Added Tax rise to raise the prices of the popular Karak Tea.

The shop raised the price of Karak tea to 150 fils from 100 fils, citing the new 10% VAT.

The ministry officials also separately said they shut eight other shops for unfairly raising the prices, on account of the 10% increase in VAT.

The raid also followed a Bahraini councillor calling for strict actions against doubling the prices of the popular Karak Tea.

Judicial Control Officers said the prices were raised, even though VAT exempts the ingredients for making the products, A member of the Northern Municipal Council, Muhammad Saad Al-Dosari, said that the shops selling the popular Karak tea are using VAT, which excludes ‘basic’ food items like tea as an excuse to hike the price of tea by up to 50%.

“This is simply a case of exploitation,” said Al Dosari.

He told the council that the undue price hike comes into effect even after clear mandates are issued to exclude ‘basic food’ commodities from VAT.

Karak tea is a commonly consumed tea in the Gulf region and is similar to masala chai but with fewer spices.

Sugar, tea, ginger, cardamom pods, saffron, cloves, peppercorns, evaporated milk are the commonly used ingredients for making Karak tea.

According to the National Bureau of Revenue, VAT excludes 94’ basic’ food products and 1,820 governmental services.

The rule also clearly states that VAT excludes sugar, salt, cardamom, coffee beans, tea and cardamom.

VAT is also not valid for green tea in packaging less than 3 kilograms, small tea bag (except above 3 grams), other black tea and partly fermented tea.