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Medical Technology Assoc bats for tax breaks for R&D centres

Press Trust of India  |  Mumbai 

Medical Technology Association of (MTaI) today urged the to provide a holiday to medical device R&D centres under the transfer act to boost investment in innovation based in-house capabilities centres and growth of the industry.

In its pre-budget recommendations for Union-Budget (2018-19), MTaI said, "The needs to provide holiday to medical device R&D centres under the transfer act to boost investment in high innovation based in-house capabilities centres."

"We also demand incentives for the industry for developing global patents from and tax deduction on made by individuals or a company for rewards earned on patent development or licensing of patents," it said.

MTaI further requested that Safe Harbour guidelines be provided for companies who are manufacturing and exporting the product as contract manufacturer/ loan licensee.

There are many companies dealing in manufacturing and export of generic drugs under contract manufacturing arrangement. There are major litigations on account of margins that the contract manufacturer should have earned by transfer cell of tax department.

The Central Board of (CBDT) has notified the Safe Harbour rule covering sector like IT/ITES, and auto component manufacturers prescribing desirable margins to avoid litigations under regulations.

Considering that weighted deductions and tax holidays are being phased out, MTaI recommended that the corporate tax rates should also be reduced for large companies in line with the government's objective to widen the tax base and make these companies globally competitive.

MTaI also raised concerns over high custom duties on There was a significant increase ranging 50-60 per cent on This has adversely impacted costs for these products in where the agenda is to provide low cost available to masses.

This is especially important in view of the fact that a significant 67-70 per cent of spends is through private spending and there exists a wide gap in local manufacturing of high quality

The association has also urged the government to reduce Minimum Alternative Tax (MAT) rate to 15 per cent.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 08 2018. 16:20 IST