Applicability Exemption U/S 801b (11A)


Querist : Anonymous (Querist) 27 November 2010

One of my Client is a manufacturer of JAGGERY . Please help me whether the benefit of tax holiday mentioned in 80IB (11A) is applicable or not. Please read the following and guide me .

The union ministry for food processing industries said that the Central Government had taken necessary steps to rationalise and simplify the tax structure for the food processing industry.
"On Income Tax side, 100 percent tax exemption for first five assessment years beginning with the initial assessment year is available under section 80-1B (11A) of Income Tax Act, 1961, to an undertaking deriving profit from the business of processing, preservation, packaging of fruits or vegetables and new units in the business of processing, preservation and packaging of meat, meat products, poultry, marine or dairy products," the ministry said.
Further it also said that under subsection (11 A) of section 80-1B of the Income-tax Act, 1961, a deduction from profits up to specified amounts is allowed in the case of an undertaking deriving profit from the business of processing, preservation and packaging of fruits or vegetables or from the integrated business of handling, storage and transportation of food grains subject to specified conditions, if such undertaking begins to operate such business on or after the 1st day of April, 2001.
With a view to preserving perishable food items like milk, poultry and meat, the finance (No.2) Act 2009 has been amended sub-section (11A) of section 80-1B with effect from April 1, 2010, to provide tax holiday in respect of the business of processing, preserving and packaging of meat and meat products and poultry, marine and dairy products for units which begin to operate such business on or after April 1, 2009.
As far as Customs & Central Excise Duties and Service Tax are concerned, the government, on its part, has extended a slew of concessions to provide a fillip to the food processing sector in India.
In Budget 2010-11 as a major initiative, "Project Import" status, which allows imports at a concessional rate of 5 percent basic customs duty, has been conferred upon cold storage, cold room (including farm pre-coolers) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat. Apart from this, "Project Import" status has also been conferred on projects for installation of mechanized handling systems and pallet racking systems, in mandis or warehouses for food grains and sugar.
Posted On : 01 Oct 10

The following is the interpretation of the statue , where the definition of agriculture produce is defined which includes Jaggery also in Definition NOW I WANT TO KNOW WHETHER TAX HOLIDAY IS AVAILABLE UNDER IT ACT.

3.5.2 The word “means” can only have one meaning that is, it is an exclusive definition: P. Kasilingam vs. P. S .G.College of Technology 1995 Supp. 2 SCC 348. In Krishi Utpadan Mandi Samiti vs. Shankar Industries 1993 Supp. 3 SCC 361 (II), question arose for inter pretation about the definition of “Agricultural Produce”. The Supreme Court observed at Page 364 as
follows :—
“It is a well settled rule of interpretation that where the Legislature uses the words “means” and “includes” such definition is to be given a wider meaning and is not exhaustive or restricted to the items contained or included in such definition. Thus the meaning of “agricultural produce” in the above definition is not restricted to any products of agriculture as specified in the Schedule but also includes such items which come into being a processed form and further includes such items which are called as gur, rab, shakkar, khandsari and jaggery.”

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