Financial Daily from THE HINDU group of publications
Monday, Jun 14, 2004
Industry & Economy
Excise and Customs
`Extend excise duty exemption to all processed food products'
Mumbai , June 13
THE Mahratta Chamber of Commerce Industries and Agriculture (MCCI&A) has urged the Union Government to exempt all processed food products from levy of Central excise duty.
The Pune-based MCCI&A is one of the largest chambers in western region from agricultural perspective.
"Considering that the food processing industry in India has not been able to achieve its full potential and optimum capacity utilisation, the industry has fallen short of its goals to create large-scale employment and save crores of rupees resulting due to wastage of fruits and vegetables," Mr D.K. Abhyankar, Director-General of MCCI&I, said in a pre-budget memorandum submitted to the Union Finance Ministry.
The industry has traditionally been taxed heavily. Such heavy taxation has resulted in processed food products going out of reach of even the middle class section of Indian society, he said.
Agriculture and food processing industry have been considered a thrust sector for the growth in GDP and is also coined as sunrise industry.
For compliance with the world standards and benchmarking, it is essential to create mass awareness for which adequate provisions as a budgetary support for training programmes are necessary. Considering the strong potential of the food-processing sector in India to generate high employment and effect on the overall growth of the economy, it is necessary to abolish cess on exports of processed foods, he suggested.
In today's globalisation era, technological progress and advancement is very rapid. New materials are being developed which are either more cost effective or eco-friendly and meet some important requirements of the consumers.
Mr Abhyankar requested the government that specialised packaging films, which are raw materials or components for the food processing industry, should be exempted or must attract nominal import duty.
"Strong steps can be taken for compelling the EU authorities to implement the decisions to permit import of milk and dairy products from Export Inspection Council (EIC) certified units in India," he said.
"We have also requested enhancement of the investment limit in plant & machinery from Rs 1 crore to Rs 5 crore. This enhancement is justified in view of the fact that the food processing industry has been considered as a thrust sector.
"For compliance with the world standards, HACCP / ISO is essential for which a lot of sophisticated equipments are required." Hence, the government must consider enhancing the investment limit, he added.
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