Punjab · State Subsidy

Punjab Food Processing Policy 2026

Open

Maximum benefit: 100% exemption of taxes and fees on raw-material purchases for 5 years; Net SGST 100% in MSP-procurement years; cap 125% of FCI or ₹500 Crore
Who can apply: Micro, Small, Medium enterprises, for specific activities only
Status: Open

Is Punjab Food Processing Policy 2026 open? Key facts at a glance

Punjab Food Processing Policy 2026 (Punjab): 100% exemption of taxes and fees on raw-material purchases for 5 years; Net SGST 100% in MSP-procurement years; cap 125% of FCI or ₹500 Crore.

Last verified: 20 Oct 2026. How we check our information

Status	Open
Level	Punjab State scheme
Type of benefit	Raw-material Tax and Fee Exemption + Net SGST + IBDP 2026 Incentives
Maximum benefit	100% exemption of taxes and fees on raw-material purchases for 5 years; Net SGST 100% in MSP-procurement years; cap 125% of FCI or ₹500 Crore
Project cost range	Any size
Who can apply	Micro, Small, Medium enterprises (Manufacturing). Only for: Only for food processing units, as the policy defines them, that are eligible under IBDP 2026. The 100% Net SGST rate applies only in a year the unit buys all its raw agricultural produce (other than wheat and paddy) in Punjab at MSP.
Implementing agency	Department of Industries & Commerce, Punjab (District Industries Centre)
Where to apply	FastTrack Punjab portal (Invest Punjab Business First)
Official notification	Read the notification (PDF) · notified 8 March 2026
Last verified	20 Oct 2026 · How we check

What is Punjab Food Processing Policy 2026?

Notified on 8 March 2026 with the other sectoral policies of IBDP 2026 (Punjab Govt. Gazette Extraordinary, notification No. PIU/IBDP-2026/Sectoral Policies/907, pages 1501–1503).

Food processing units eligible under IBDP 2026 get the IBDP incentives within a higher overall ceiling of 125% of FCI or ₹500 crore, plus their own extras.

All taxes and fees paid on the purchase of raw material — mandi fee, rural development fee and other State levies — are 100% exempt for five years from commercial production.

In each year a unit buys 100% of its raw agricultural produce, other than wheat and paddy, in Punjab at the minimum support price, its Net SGST reimbursement is 100% instead of the IBDP rate of 75%; five such years in a row add 10% of FCI to the annual ceiling of the sixth year.

Meat processing units get a simplified way to pay mandi fee and rural development fee. The eligibility period, annual ceiling and disbursement follow IBDP 2026.

Official notification (PDF) · notified 8 March 2026

What are the key benefits of Punjab Food Processing Policy 2026?

100% exemption of all taxes and fees paid on the purchase of raw material (mandi fee, rural development fee and other State levies) for five years from commercial production.
Net SGST reimbursement of 100% (instead of 75%) for each year the unit buys 100% of its raw agricultural produce, other than wheat and paddy, in Punjab at MSP.
Five such years in a row add 10% of FCI to the annual ceiling of the sixth year.
Overall ceiling of 125% of FCI or ₹500 crore; simplified payment of mandi fee and rural development fee for meat processing.

What could a unit get under Punjab Food Processing Policy 2026?

The ceiling the scheme sets. What a particular unit receives depends on its project cost, location and the conditions on this page, so no rupee figure is worked out here.

Up to the scheme’s limits: 100% exemption of taxes and fees on raw-material purchases for 5 years; Net SGST 100% in MSP-procurement years; cap 125% of FCI or ₹500 Crore

Illustrative only: this is the scheme’s maximum, not an estimate for your unit. Source: Punjab Food Processing Policy 2026 — Punjab Govt. Gazette (Extra.), 8 March 2026 — Sectoral Policies notification No. PIU/IBDP-2026/Sectoral Policies/907, pages 1501–1503.

Who can apply for Punjab Food Processing Policy 2026?

Applies only to: Only for food processing units, as the policy defines them, that are eligible under IBDP 2026. The 100% Net SGST rate applies only in a year the unit buys all its raw agricultural produce (other than wheat and paddy) in Punjab at MSP.

Food processing units as defined in the policy (clause 6(ii)) that are eligible under IBDP 2026 (new units, or existing manufacturing units expanding).
MSMEs must reach at least ZED Bronze by the time the I-CAF is approved to claim post-production incentives (IBDP 2026 clause 5.1.6).

Eligible business types

Manufacturing

MSME categories covered

MicroSmallMedium

Eligible industries

🍽️ Food Processing🌾 Agri & Livestock Processing

How do I apply for Punjab Food Processing Policy 2026?

Apply as under IBDP 2026: file the Common Application Form (CAF) on the FastTrack Punjab portal, then, after commercial production or operations start, the Incentive Common Application Form (I-CAF) within three months of the end of that financial year, choosing the eligibility period once.
The eligibility period, the annual ceiling and the yearly claims follow IBDP 2026 clauses 5.1.2 to 5.1.4 (claims on Form INC within twelve months of the end of each financial year).

Apply at: FastTrack Punjab portal (Invest Punjab Business First)

Which documents are needed for Punjab Food Processing Policy 2026?

CAF and I-CAF on FastTrack Punjab
Udyam Registration and GSTIN
FSSAI licence
Detailed Project Report with the Fixed Capital Investment break-up
Raw-material purchase records showing purchases in Punjab at MSP (for the 100% Net SGST year)
Annual Production Return and audited balance sheet

Can Punjab Food Processing Policy 2026 be combined with other schemes?

This scheme can be combined with the following for higher total benefits:

Punjab IBDP 2026Capital Subsidy + Net SGST Reimbursement + Duty Exemptions CGTMSECollateral-free Loan Guarantee

Why are Punjab Food Processing Policy 2026 applications rejected?

Unit not a food processing unit as the policy defines it, or not eligible under IBDP 2026
100% Net SGST claimed for a year in which not all raw produce was bought in Punjab at MSP
Wheat or paddy counted towards the MSP-procurement condition
No ZED Bronze certification when claiming post-production incentives under IBDP 2026

Subsidy Setu's DPR preparation process addresses all common rejection points before filing.

Frequently asked questions about Punjab Food Processing Policy 2026

Is Punjab Food Processing Policy 2026 open?: Yes, it is open for applications. Status last verified: 20 Oct 2026.
Who can apply for Punjab Food Processing Policy 2026?: Micro, Small, Medium enterprises (Manufacturing). Only for: Only for food processing units, as the policy defines them, that are eligible under IBDP 2026. The 100% Net SGST rate applies only in a year the unit buys all its raw agricultural produce (other than wheat and paddy) in Punjab at MSP.
What is the maximum benefit under Punjab Food Processing Policy 2026?: 100% exemption of taxes and fees on raw-material purchases for 5 years; Net SGST 100% in MSP-procurement years; cap 125% of FCI or ₹500 Crore.
How do I apply for Punjab Food Processing Policy 2026?: 1. Apply as under IBDP 2026: file the Common Application Form (CAF) on the FastTrack Punjab portal, then, after commercial production or operations start, the Incentive Common Application Form (I-CAF) within three months of the end of that financial year, choosing the eligibility period once. 2. The eligibility period, the annual ceiling and the yearly claims follow IBDP 2026 clauses 5.1.2 to 5.1.4 (claims on Form INC within twelve months of the end of each financial year). Apply at: FastTrack Punjab portal (Invest Punjab Business First).

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