In order to provide the agriculture sector with a much-needed boost, the government must give tax incentives to rural infrastructure projects in the sector, a top commodity exchange said on Friday.
?As there are tax incentives for infrastructure projects, similar incentives should be extended to projects associated with development of rural agriculture infrastructures such as warehousing, cold storage and others,? Multi Commodity Exchange?s (MCX) deputy managing director Joseph Massey told FE.
The government had amended Income Tax act, 1961 in 2005 to provide all infrastructure projects a five-year tax holiday.
Massey said better infrastructure was not only critical in the supply chain of the agricultural commodities, it also boost rural economy. ?Global experience indicate that growth of commodity futures has helped reduce supply chain, cut marketing costs, reduce wastages and boost investments in commodity related infrastructures etc,? he said.
On the forthcoming Budget, Massey said government must ensure uniform value-added taxes (VAT) structure across all states, which would support farmers, traders and consumers. ?We hope that futures trading band on wheat and rice would be revoked by the government as it does not help anyone,? he said.
MCX has urged the banks to provide advance against commodities whose future prices have been already agreed in by the participants in the futures platform at a concessional rates. ?The futures trading ban on wheat and rice must be revoked as it is not serving any purpose,? Massey added.