Pharma Ind expects level playing field in excise duty

The pharmaceutical industry of India expects the Union finance minister to pay heed to their grievances in the coming Budget.

According to Indian Drug Manufacturers Association President and Pharmexil Vice-Chairman N R Munjal, the Budget should address the need for research and development (R&D) and the anomalies in the excise duty for the pharma sector.

He said the Union Budget for the last four years did not focus on the push required for R&D in the pharma sector.

“India ranks third in volume and 13th in value in the global pharma market, so there is a tremendous scope for improvement. Since IPR (intellectual property rights) are intangible assets, a measly funding is earmarked for such projects.”

He added, the PPP (public-private partnership) mechanism for the pharma business was quite cumbersome. Most of the pharma companies are flourishing under the PPP model where private universities, government labs and pharma companies collaborate for R&D. We are lagging in this, he rued.

Surya Pharmaceutical Limited Managing Director Rajiv Goyal said, the disparity in the excise duty on finished goods and raw material (the excise duty on raw material is 10.3 per cent and on output is 4 per cent) should be removed. This is the only industry with a differential excise duty on input and output cost.

This has specifically hit the units in tax-free zones as the units located in other parts can obtain 10 per cent modified value added tax to save the tax burden.

Himachal Drug Manufacturers Association Chairman Sanjay Guleria said, the Union Budget should revise the Drug Price Control Order (DPCO). There is a proposal of including 300 drugs under the category of essential drugs, presently there are 72 drugs under this.

Due to the scarce availability of skilled labour, the cost has been rising for drug manufacturers, still Indian drugs are the cheapest in the world.

The government should make provisions for the development of the pharma sector by allocating more funds for R&D and streamlining the tax structure, he finished.