Excise duty exemption on many processed food items
New Delhi, Feb 28: With a view to give a fillip to the Food Processing industry, Finance Minister P Chidambaram today (Feb 28, 2006) proposed to fully exempt from exise duty condensed milk, ice cream, preparations of meat, fish and poultry, pectin, pasta and yeast.
Presenting the General Budget 2006-07 in the Lok Sabha today, Mr Chidambaram said that exise duty on ready-to-eat packaged foods and instant food mixes like Dosa and Idli mix, will be reduced from 16 per cent to 8 per cent.
The Finance Minister also proposed customs duty reduction on packaging machinery which serve a wide variety of industries, including Food Processing Industry. He proposed to reduce the duty on packaging machines from 15 per cent to 5 per cent.
Re-financing loans for food proceesing unit
Recognizing the enormous benefits that the food processing industry can bring to agriculture and job creation, and to consumers, food processing will be treated as a priority sector for bank credit, Finance Minister P Chidambaram announced in the Lok Sabha today.
NABARD will create a separate window with a corpus for Rs 1,000 crore for re-financing loans to the sector, especially for agro-processing infrastructure and market development.
The Government will also set up the National institure of Food Technology Entrpreneurship and Management, Mr Chidambaram said during his Budget speech.
The Paddy Processing Research Centre at Thanjavur will be developed into a national-level institute.