No Indirect Taxes for Food Processing Industries
What is Indirect Tax?
An indirect tax is a tax levied on goods and services rather than the profit or income earned on those goods and services. Indirect tax increases the actual price of the goods and services. It is usually paid by the consumers at the time of purchasing the goods An Indirect tax burden can be shifted from one person to another person.
Exemption of food processing industry from indirect tax:
In the new budget most of the industries are exempted from the indirect tax, one of them is the food industry one of the most important industry for an economy. Increasing standards of living and tremendous change in lifestyle has given a considerable push to the food processing industries. India has a tremendous potential to grow in the food sector reason being:
· Highest producer of milk.
· Second largest producer of fruits and vegetables.
· Third largest producer of food grains and fish.
Focus on this industry will give a great boost to the economic growth. India already is a leading producer in some of the food products, to make this industry grow more rapidly, ministry of food processing is coming out with some of the new schemes.
Government has given tax benefits to this sector so that it can steadily concentrate and focus on the contribution to the GDP of the country.
INDIRECT TAX BENEFITS TO FOOD PROCESSING INDUSTRIES ARE:
Service received on the loading, unloading, storing and warehousing is not to be taxed in case of food industries.
-The goods are cleared for indented purpose
-The procedure laid in the CE is followed
-Some of the products in this industry are levied less excise tax %:
· No excise duty on milk products, vegetables, nuts, fruits and dry fruits.
· standard excise duty of 12%, processed fruits & vegetables carries a merit rate of 2% without CENVAT or 6% with CENVAT
· Soya Milk Drinks, flavored Milk of Animal origin carry a duty of 2% without CENVAT or 6% with CENVAT
-Projects for the installation of mechanized food grain handling systems and pallet racking.
-Cold storage, cold room (including for farm level pre-cooling or industrial projects for preservation, storage or processing of agricultural, horticultural, poultry, and marine produce).