FDI in food processing sector is quite encouraging. The amount of FDI inflow for Food Processing Sector in India during the financial year 2010-11 up to November 2010 is Rs. 576.50 crores as compared to total FDI of Rs. 5344.22 crores.
Besides attracting FDI through schemes like Mega Food Park, the Government has also extended several fiscal incentives during this financial year to enhance FDI in food processing sector like:-
Full exemption from excise duty has been given to specified equipments for preservation, storage or transport of apiary, horticultural, dairy, poultry, aquatic & marine produce and meat and processing thereof.
Project imports status, with concessional rate of basic customs duty of 5% has been granted to the initial setting up or substantial expansion of a cold storage, cold room (including farm pre-coolers) for preservation or storage or an industrial unit for processing of agricultural, apiary, horticultural, dairy, poultry, aquatic & marine produce and meat.
Truck Refrigeration units manufacturing refrigerated vans/trucks have been fully exempted from basic customs duty.
Exemption from service tax has been provided to services relating to ‘Erection, Commission or installation’ of
• Mechanized Food Grain Handling Systems etc.
• Equipment for setting up or substantial expansion of cold storage; and
• Machinery/equipment for initial setting up or substantial expansion of units for processing of agricultural, dairy, poultry, aquatic, marine or meat products.
The scope of exemption of service tax has been expanded to include food grains and pulses in addition to fruits, vegetable, eggs and milk.