Cold Chain in India
Budget relief for cold chain
In order to push growth in the agriculture sector and contain wastage of farm produce, Indian Finance Minister Pranab Mukherjee announced a series of tax relief measures that include concession on customs duty and exemption of service tax on setting up of cold chains in India’s union budget 2010 -11.
Outlining the objectives in his Budget speech, the Finance Minister said a focused attention is needed to create a strong supply chain for perishable farm produce, setting up infrastructure facilities for processing of such produce and infusion of technology to boost agri-production.
In order to achieve the objectives, Mukherjee proposed a concessional import duty of five per cent with full exemption from service tax to set up and expand cold chains to preserve farm produce as well as milk, meat, poultry products. In India, wastage of fruits and vegetables, which are perishable in nature, stands at over Rs 50,000 crore a year that nears the annual food subsidy bill.
Mr. Atul Khanna, president of the GCCA (Global Cold Chain Alliance of the US) India Chapter told fnbworld that “Budget 2010-11 has sent positive signals across the Indian cold chain fraternity as it shows that the Government finally realizes that mass cold chain compliance is the need of the hour to halt unnecessary wastage in the food chain so vital to our economy”.
"Similar attention needs to be paid to related sectors such as apiary, horticulture, dairy, poultry, meat, marine and aquaculture," he added. Many experts feel that exempting the food processors from service tax for expansion of their units would benefit manufacturers of juice, jam, sauce and pickles among others".
The Finance Minister has announced concession on import duty of 5 per cent to establish mechanized handling systems and pallet racking systems in mandis or warehouses for food grains and sugar. Full exemption from service tax for the installation and commissioning of such equipment has also been provided.The move would help Food Corporation of India (FCI), which is facing a labour problem, in handling the food grains stored in its warehouses, experts said.
Mr. Mukherjee allowed duty-free import of refrigeration unit, which is required to make refrigerated vans or trucks. He said concession for custom duty of 5 per cent would be offered to specified agricultural machinery not manufactured in India. He also exempted trailers and semi-trailers used in agriculture from excise duty. In an effort to promote healthy and disease-free seeds, he proposed to exempt the testing and certification of agricultural seeds from service tax.