In a major initiative, the Andhra Pradesh government has put the edible oil refining units in the State in the negative list for incentives being offered under the Food Processing Policy 2015-2020.
The government has issued orders considering the demand from the industries to put the sector in the negative list.
Accordingly, edible oil has been placed in the list of ineligible units that included aerated water, packaged drinking water, ice factory rice, dal and flour mills and groundnut oil expellers, among others.
In the orders issued on Friday, the government said the Krishnapatnam Edible Oil Refiners Association had represented to the government that there was excess edible oil refining capacity in the country, more particularly in Andhra Pradesh. Several existing units with a refining capacity of 11.7 lakh tonne had already been declared non-performing assets by the banks. In these circumstances, attracting investments into the refining sector with 5 per cent VAT reimbursement would only aggravate the problem and the existing units would not be able to function, the industry said. The association had therefore requested the government to put edible oil refining units in the State in the negative list for granting tax incentives under the State’s policy.
