Industry & Economy
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Budget
CII seeks rationalisation of excise duty in food processing
Our Bureau
New Delhi, Feb. 25 The CII has called for rationalisation of the excise duty structure in its budget wishlist for the food processing industry.
The confederation is hoping for an elimination of anomalies and creation of a more broad-based, unified taxation regime. It points out that the sector is characterised by differential in excise duty structure for similar products.
Duty structure
For example, while sugar boiled confectionery attracts eight per cent excise duty; chewing gums, jelly confectionery, toffees and caramels are taxed differently. There are anomalies within the category too, with innovative products (branded) attracting an excise duty of 16 per cent ‘ad valorem’, says CII.
The excise tariff on biscuits with RSP above Rs 100 per kg and wafer biscuits is 8 per cent, for those coated with chocolate or containing chocolate there is an excise duty of 16 per cent, it says. Tax on bottled water reduced to 8 per cent from 16 per cent and not tagging the business with carbonated or aerated beverages would also be welcome.
Packaging material
India is the world’s second largest producer of food next to China, and processed food consumption in India is estimated at Rs 4,600 billion (Rs 4,60,000 crore), according to CII. However, the level of processing and value addition is significantly lower than developed countries and many developing countries.
CII has also called for excise duty on packaging material, such as flexible laminate, plastic film, printed or mono carton, glass jar and aseptic packaging of aluminium foil, amongst others, to be cut to 8 per cent. It would also like innovation in food processing industry to enjoy 150 per cent weighted deduction on in-house R&D expenditure, and depreciation on plant and machinery to be increased from 15 per cent to 25 per cent. It has also called for provisions for fringe benefit tax as applicable to pharma industry.
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