Wednesday, 11 December 2013

Incentives Provided by the Government to Cold Chain Sector

Minister of State for Agriculture and Food Processing Industries, Dr. Charan Das Mahant
With the objective of providing incentive to create integrated cold chain and preservation infrastructure facilities in the Country, Ministry of Food Processing Industries is implementing the Scheme of Integrated Cold Chain, Value Addition & Preservation Infrastructure.

 Under the scheme, grant-in-aid is provided @50% of the total cost of Plant and Machinery and Technical Civil Works in general areas and @75% in difficult areas i.e. North-Eastern States, Sikkim, J&K, Himachal Pradesh andUttarakhand, subject to a maximum of Rs. 10 crore per project.

In addition, National Horticulture Mission (NHM), National Horticulture Board (NHB), and National Cooperative Development Corporation (NCDC) under Ministry of Agriculture, Department of Agriculture and Cooperation, Agricultural and Processed Food Products Export Development Authority (APEDA) under Department of Commerce in the Government of India and State Governments are also providing assistance for setting up cold storages under their respective schemes.


1.      Under Section 35-AD of the Income tax Act 1961, deduction for expenditure incurred on investment is allowed if this investment is wholly and exclusively for the purpose of  (i) setting up and operating a cold chain facility; and (ii)  setting up and operating warehousing facility for storage of agricultural produce. This deduction is allowed to the extent of 150% provided the taxpayer has commenced its business on or after 01.04.2012.   

2.      Government has extended Project Imports’ benefits to Cold storage, cold room (including for farm level pre-cooling) or industrial projects forpreservationstorage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat. Consequently, all goods related to Food Processing, imported as part of the project, irrespective of their tariff classification, would be entitled to uniform assessment at concessional basic customs duty of 5%.

3.      All refrigeration machineries and Parts used for installation of  cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat under Tariff Head: Chapter 84 are exempted from Excise Duty. 

4.      Construction, Erection, Commissioning or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce including Cold storages for such purposes are exempted from Service tax.

5.      Capital investment in the creation of modern storage capacity has been made eligible for viability gap funding scheme of the Finance Ministry. The cold chains and post-harvest storage has been recognized as an infrastructure sub-sector.

            This information was given in Rajya Sabha today by Minister of State for Agriculture and Food Processing Industries, Dr. Charan Das Mahant in a written reply.

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