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Wednesday, Jul 14, 2004

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Budget proposal to help value-added chicken units

G. Gurumurthy

Coimbatore , July 13

THE lowering of excise duty from 16 per cent to 8 per cent for poultry announced in the Union Budget for 2004-05 may not directly benefit either the poultry farmers or the commercial layer/broiler producers unless they are into the production of the value-added chicken products, according to Mr Soundararajan, Managing Director of the Rs 400-crore Suguna Poultry group.

Mr Soundararajan, reacting to the Budget proposals, said the lower duty rate will largely benefit those in the value-added poultry products such as those involved in cooked/ready-to-eat kind of products or chicken sausage.

He, however, felt that the cut in excise duty for poultry would send positive signals for those seeking investment into the value-added manufacture and through them this would aid indirectly the poultry farms in the long run.

The budget has, however, skirted two of the key demands of the poultry sector. The removal of the countervailing duty of 16 per cent on vitamins and amino acids imported for use in poultry feed/nutrients as sought by the integrated poultry producers was not met. Similarly, their demand to reintroduce 80JJ, which earlier used to offer exemption to their income from poultry from income tax to the extent of 33 per cent, was also not granted.

"We did make a forceful plea against levying the countervailing duty of 16 per cent on import of amino acids and vitamins because these items are not indigenously available but the government has not acceded to our demands," he added.

Mr Soundararajan said the broiler producers had sought the Centre to exempt the live poultry sector from the purview of the value-added tax (VAT) system by shifting it to the VAT schedule for exempted goods category.

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