The Hindu Business Line : Food processing policy moots tax holiday for units

THE draft National Food Processing Policy proposes a 10-year tax holiday for food processing units, simplification of documentation and procedures under taxation laws and a host of other infrastructural initiatives to create an appropriate environment for entrepreneurs to set up industries in this sector.

According to a statement from the Food Processing Ministry, the policy draft has been put up on the Ministry's Web site for comments and suggestions from the public till January 30 next year.

The draft also proposes setting up of an Equalisation Fund to ensure sustained raw material supply at a particular price level and the development of marketing capabilities in terms of infrastructure and quality to promote competitive capabilities.

It moots development of a futures market that can ensure minimum price stability to the farmer and a sustained supply of raw material to the processor and putting in place a mechanism to reduce the gap between the farm gate price of agro-produce and the final price paid by the consumer.

As per the draft, regions including the North-East, hilly areas, islands and the ITDP areas in the country to be given not only special attention but special consideration.

Fiscal incentives like excise duty/sales tax concession and tax holidays are to be provided not only to those units set up in these areas but to those units which, though set up outside these areas near the market centre, are engaged in processing the produce coming from these areas.

Tax holiday for food processing units, with the exception of liquor, cigarettes and aerated drinks and similar luxury items, would be for a period of 10 years.

Establishment of cold chains, low-cost pre-cooling facilities near farms, cold stores and grading, sorting, packing facilities to reduce wastage, and improvement of quality and shelf life of products are also to be accorded priority.

The policy said that the Government will make efforts to encourage setting up of agro-processing facilities as close to the area of production as possible to avoid wastage and reduce transportation cost.

Besides, on the agenda is development of area-specific agro food parks dedicated to processing the predominant produce of the area, development of an `anchor industrial centre' and/or linkage with `anchor industrial units' having network of small processing units and the development of agro-industrial multi-products units capable of processing a cluster of trans-seasonal produce.

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