As per the Union budget, these services, which were previously exempt, would now attract service tax of 12.36 per cent. The move, industry players say, would increase the cost of drug development in the country and lead to a corresponding increase in the price of the tested drugs.
"Drug development in India is already facing challenges on several fronts following which the number of global and local clinical trials has come down substantially.
"The decreased number of trials will impact availability of drugs in the medium-to-long term and will increase dependence of Indian patients on imported drugs. We have urged for keeping these services out of the service tax for another five years," ABLE said in a statement here.
The industry body has also requested to retain the existing CTRI website for clear visibility of clinical trials in the country.
ABLE President Dr P M Murali said, "India's pharma and biotech industry has the potential to generate combined revenues of more than USD 100 billion by 2025 from approximately USD 25 billion as of today. To realise this quantum of growth, the right policy framework needs to be put in place. The sector must be provided with incentives through a number of tax-friendly measures to make it globally competitive.