As it seems, the food processing industry is unlikely to gain any adverse impact regarding taxation under the proposed GST regime. It is because the sector shall continue to be levied at existing tax rates, according to a superior official at the Food Processing Ministry.
As per record, the industry like others has demanded to be taxed with the minimum rates under the GST regime to enhance growth and lure in more investors. At the International conference of “India Farm 2 Fork 2016”, J P Meena, Special Secretary at the Food Processing Ministry, gave assurance to the industry of no adverse impacts due to the arrival of the GST regime on the sector.
The lack of information regarding the GST has pushed people to wonder over the darker side that the regime may lead to. However, all the earlier and ongoing discussions and announcements regarding GST have been positive and must lead anybody’s mind towards nothing negative. During the event, Meena said,
As the available indication hints that it might continue to be taxed at the existing rates post the initiation of GST, the food processing sector has nothing to worry about in terms of facing higher taxation slabs.
Not only does the tax rate remain similar, the government has lowered the taxes significantly. To be precise, the excise duty over food processing industries shall be reduced from 10% to 6% under the GST regime. With these words Sadhvi Niranjan Jyoti, the Minister of State for Food Processing, addressed the conference, easing the minds at work within the industry. She further added that the government might be taking many more initiatives eventually to make this sector much more vibrant and place it on the global map.
Taking about the post-harvest losses of the agro-produce, Meena spoke of the government’s focus on evolving policies that would boost food processing and diminish agro-wastage by a margin of 50% within the next 5 to 6 years.
With all that has been said and told, focus of the industry must lay in manufacturing quality processed foods which will be accepted within the international markets. The food safety regulators have already been asked to streamline standards and norms in this regard.
Other announcements echoed the ears in the conference. According to the industry reports, the foreign direct investment of the sector has been around US$ 500 million per annum in the last three years. And to not mark it as a halt but just the beginning of a far better future, 42 mega food parks will be coming up all across the country at different locations. This shall drive-in more business and therefore, a much stronger and broader economy.
[Image Source: The Dollar Business]