Customs and excise duties on cold chain equipment need to be pegged at 5% or below to encourage domestic and foreign investments for minimising horticultural wastages and increasing shelf life of products, industry body Assocham said on Tuesday.
Currently, customs duty of 7.5% and excise duty of 16% is levied on these products. Horticulture accounts for 28% of value addition in the agriculture sector and 52% of agri-exports but takes only 9% of arable land. It is also characterised by high wastages - up to 35% in case of certain fruits and vegetables.
Large-scale investments are thus required to minimise waste and improve farmer realisations, said RN Dhoot, president of The Associated Chambers of Commerce and Industry of India (Assocham) in a pre-Budget memorandum to the finance minister.
Cold chain infrastructure is not confined to cold storages but extends to temperature handling across the value chain from farms to consumers. It includes farm level pre-coolers, small capacity chill cold storage, refrigerated trucks, food processing plants, refrigerated display cabinets for retail shops and deep freezers.
All pre-packaged goods intended for retail sale - in relation to which declaration of retail sale price on the package is required under the Standards of Weights and Measures Act or such similar laws - are exempt from levy of additional duty of customs that is leviable under section 3(5) of the Customs Tariff Act.
However, the exemption is not available if the goods are imported in bulk and are re-packed in the country before retail sale. "It is essential that an integrated holistic view of agriculture value chain is taken towards providing the necessary fillip to stagnating agricultural growth," said Dhoot.
This requires a joint participatory approach from all concerned stakeholders including farmers, input vendors, traders, processors and the government. Private investments can provide the necessary boost to the already committed government spends and can have a multiplier effect in the rural economy.
An enabling policy framework with attractive fiscal incentives can be provided in the
Budget to attract private investments in the rural economy, said Dhoot.
Source : moneycontrol.com