The government has given exemption from service tax to certain pre-cold storage services for fruits and vegetables, a move aimed at promoting food processing sector and checking price rise of perishable items.
“The tax exemption is being extended to certain pre-cold storage services in relation to fruits and vegetables so as to incentivise value addition in this crucial sector,” Finance Minister Arun Jaitley said in the Budget.
The Budget document elaborated that exemption would be on services by way of pre—conditioning, pre—cooling, ripening, waxing, retail packing and labelling of fruits and vegetables.
The government also clarified that service tax exemption to transportation of ‘food stuff’ by rail, vessels or road, will be limited to foodgrains including rice and pulses, flours, milk and salt.
The document added that transportation of agricultural produce is separately exempted, which would be continued.