Feb 06, Colombo: Sri Lanka has retracted the new cess it imposed on bulk tea exports amid protests from political parties as well as from the industry.

Sri Lankan government suddenly increased the cess for bulk tea exports effective from January 23, 2013 to Rs. 10 per kilogram or five percent from the preceding week's auction average price, whichever is higher.

Sri Lanka government coalition party Jathika Hela Urumaya (JHU) today protested the increasing of cess for the tea industry.

JHU in a statement signed by the party national organizer Nishantha Sri Warnasinghe said that the higher cess will discourage the plantation industry.

The nationalist party further said that the Minister of Commerce and Industries Rishad Bathiyutheen introduced the cess without informing the Plantation Industries Minister Mahinda Samarasinghe.

The Marxist party Janatha Vimukthi Peramuna (JVP) also pointed out that increasing the cess on export of tea by 100% has a drastic effect on the tea industry and urged the immediate withdrawal of the cess hike.

According to a report in state-run newspaper Daily News the new cess has been revised with the intervention of President Mahinda Rajapaksa following a request by Plantation Industries Minister Mahinda Samarasinghe.

The new cess, which will be effective from March 01, 2013, for bulk tea will be Rs 10 per kilogram or 2.5 percent on the preceding three month's auction average price which had been recorded one month prior to the revision, whichever is higher.

Previous Cess for bulk tea Exports, which is Rs 10 per kilogram, will be in force until March 1.