FICCI urges sops for packaging industry

New Delhi: In an effort to boost the competitiveness of the food processing industry, the Federation of Indian Chambers of Commerce and Industry has recommended a fiscal incentive package for the packaging industry.

Towards this end it elicited views of 225 respondents from across the country, including food processing companies representing sectors such as dairy, bakery, meat and poultry, and fruits and vegetable processors.

The package includes recommendations for nil import duty on packaging machinery, central excise tax on equipment for both packaging and processing to be reduced from 16 to 8 per cent, exemption of packaging machines used for food packaging, and abolition of excise on packaging material for packing fresh fruits, vegetables and grains.

Tax holiday

The recommendations also include granting tax holiday under Section 80-IB (8A) to companies exclusively engaged in research and development activities, with R&D as the main object in their Memorandum and Articles of Association, as also a similar tax holiday for the packaging industry for R&D.

The survey also recommended incentives for capital goods infrastructure development and new technology.

Extensive linkages

According to the report, the domestic packaging industry, worth $18.8 billion, consists of 700 packaging machinery manufacturers, the majority being in the small and medium sector.

Its average rate of growth has been pegged at 15 per cent, with linkages that are extensive and high employment creating.