More essential drugs get duty exemption

Earlier in July, finance ministry had exempted excise duty only on first batches of scheduled drugs

The government has extended a 30-day excise duty exemption for re-packaging of essential medicines to the batches whose prices were revised in July, August and September.

In July, the finance ministry had exempted excise duty only on the first batches of scheduled drugs whose prices were fixed in May and June after the National Pharmaceutical Pricing Authority (NPPA) implemented the new Drugs Price Control Order (DPCO). According to this, prices are capped at the average price of all medicines in a particular segment with a market share of at least one per cent.

The government had initially given companies manufacturing these 348 essential medicines 45 days to comply with the new price order. However, since companies had to recall the existing batches of such medicines from the market and repackage and re-label them, the government exempted excise duty on the batches of medicines whose prices were fixed in the first lot.

“The Department of Pharmaceuticals (DoP), on being satisfied that it is necessary in the public interest to do so, extends the period of validity of exemption for a period not exceeding 30 days from the date when the period of 45 days expires, as granted by Department of Revenue, for the above said purpose in respect of price notifications dated 22.07.2013, 21.08.2013 and 20.09.2013 issued by NPPA,” said a recent notice by the DoP.

The revenue department issued a notification on July 29, giving 30 days additional time to the manufactures of whose prices were revised on May 15 and which were subjected to re-printing, re-labelling, re-packing or stickering.

While companies were demanding more time to comply with new prices and some drug makers also approached various high courts, the latest move comes as a relief for drug makers.