New Delhi, Dec 08: Food processors have voiced concern over the Kelkar report's recommendation for imposing excise duty on perishable food products saying that this will put the clock back for the industry and result in increased rotting of potatoes, onions and tomatoes while there is no infrastructure to process them. They said it is shocking that even items like 'papad', 'sevian', soups, 'mithai' (sweetmeats) and 'achar' (pickle) along with infant foods, meat preparations, milk, fruits and vegetable products are proposed to be brought under the excise duty net. "Kelkar report's suggestion is regressive in nature and will undo the benefits which accrued to food processing industry when it was exempted from excise duty in 2001 budget," president, All India Food Processors Association Subodh Jindal told adding past trends show it will result in negative growth in the sector. He pointed out that in the 1991-97 period when food processing industry was exempted from excise duty, it experienced 22.8 per cent growth annually and the growth fell by 5.2 per cent when the duty was again levied in 1997. Processors argue that when production and harvesting which come under agriculture are exempted from taxation, processing, storage, packaging and distribution which are part of the same food chain must not be discriminated against.
Association's secretary K P Sarin said tax policy is not aimed at revenue collection alone but also facilitation of growth of a sector as illustrated in agriculture adding that there is hardly two per cent processing in food sector.
Bureau Report