The Hindu : Business : `Exempt perishables from VAT'

Online edition of India's National Newspaper
Friday, Apr 08, 2005

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Business

`Exempt perishables from VAT'

By Gargi Parsai

NEW DELHI, APRIL 7. The Food Processing Ministry has asked the Empowered Committee of the State Finance Ministers for Value Added Tax (VAT) to reduce the VAT on non-perishable food products to 4 per cent from the existing 12.5 per cent and exempt perishables from VAT altogether. Post-harvest loss in agriculture commodities for want of infrastructure including cold storages and warehouses is estimated at Rs 50,000 crore per annum.

Revealing this here today the Minister of State for Food Processing Industries, Subodh Kant Sahay expressed his dissatisfaction with the way things were moving for the food processing sector. This, despite India being number one producer of milk, second largest producer of fruits and vegetables, third-largest producer of foodgrains and the seventh-largest producer of fish.

He later released a Vision Document 2015 for the food processing Industries, which envisages raising India's global share in food trade from one per cent of a total of $ 460 billion (Rs 20 lakh crore) to three per cent (Rs 13,50,000 crore) by 2015.

The Government has plans for launching five more mega food parks in parts of the country including one in the Northeast. A National Institute of Food Technology Management of international standard is also being planned for manpower training in food sector.

The strategy for improvement includes demand-driven approach, rationalisation of tax regime, linking farm to food processing, improving food standards and safety norms and a campaign to enhance India's brand image. The National Dairy Development Board's Safal model is what the ministry hopes will deliver them.

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