The British Tea Act The British parliament had passed an act on May 10 1773, known as the Tea Act. Its primary purpose was to lessen the excess tea supplies held by the East India Company. Their warehouse in London was financially weak and therefore, cutting the price of the tea that was being sold to North America would help generate more sales and therefore save the Company from getting bankrupt. Another reason of doing this was to make tea legally cheap so that it was not smuggled into America. Moreover, if the Americans started to purchase the tea, they would be implicitly agreeing to the taxation terms of the British parliament.
The history and particulars of The Tea Act are given here forth. This act allowed the East India Company to pay less tax to the government of Britain therefore allowing it to sell the tea cheap to the US colonies. The British tea became so cheap that when Dutch tea came into the market, it was more expensive even though it was not taxed. According to the act the Company was allowed to sell tea directly to North America duty free. The colonies harassed the Company’s authorized consignees while in many areas they had successfully prevented the tea from landing on American grounds. The particulars included:
License was granted to the Company to export tea directly to the American Colonies.
It was no longer obligated to sell tea in the London Tea Auction.
The tax on exports of tea to North America will be refunded.
As a result, the American colonies waged a protest against the British government because the tea that was entering England was cheap and untaxed. This taxation tyranny led to such an intensive protest, that the colonies actually announced to send back three ships to England that had come from the East India Company. The governor of Massachusetts was reluctant of doing so and stopped the action.
As a reaction of this, the American patriot leader announced for a 60 men event, called the Boston Tea Party. The event was not an actual tea party, but it was a plan to get back at the British. On 16 December 1773, the patriots dressed as Native Americans got on British Ships and dumped their cargo of tea into the sea. The total tea that was thrown, valued 18,000 British Pounds at that time.
The parliament in the ‘Taxation of Colonies Act 1778’ revoked a number of taxes including the tea tax. The act had been recognized as a dead letter throughout. It was officially revoked once the Statute Law Revision Act 1861 was passed.
Source: http://www.researchomatic.com/The-Tea-Act-87858.html