FICCI Recommends Various Tax Reductions on Pharmaceutical Industry

Dec. 16, 2006 – FICCI (Federation of Indian Chambers of Commerce and Industry), in its pre budget demand list, has urged that the government should extend 150% weighted deduction on investments made by pharmaceutical companies in building and land for the purposes of R&D (Research and Development).

The federation has also solicited waiver of excise and custom duties and service tax for revenue expenditure, capital goods, and services received by research and development units. In its pre budget memo to govt., FICCI has recommended that chosen life saving drugs ought to be given full exemption from custom duty. Today, these drugs attract custom duty ranging between 5%-12.5%.

The federation has also asked for reduction in excise duty on pharmaceuticals from 16% to 8%. It has also sought a review of duty structure and naptha rate. As per FICCI, the levy on naptha for chemical industry needs to be brought at same level as naptha for plastics, which is at zero percent. Naptha, which is a raw material for most chemicals, bulk drugs and fine chemicals, attracts ten percent of import duties. On the other hand, either zero percent or confessional rate of duty is attracted by life-saving drugs.

FICCI has also suggested that diminution on MRP in pharmaceutical industry ought to be raised to 45% from its current level of 40%.

As per the views expressed by a senior Research Analyst at RNCOS, who has recently researched a report on “World Pharmaceutical Market (2007)”, the market for pharmaceutical products is expanding rapidly. Naptha is allowed at zero percent duty by China, which is an archrival of Indian pharmaceutical industry. This makes an adverse affect on the global competitiveness of Indian pharmaceutical companies.

“World Pharmaceutical Market (2007)” report also addresses the issues and facts that are critical to the success of pharmaceutical industry worldwide, such as:

– Emerging trends in the global pharmaceutical industry.
– Who are the key players in this sector?
– Get an insight into the trends in market performance.
– Pinpoint sectors of growth and identify the driving factors.
– Identify market, brand leaders and understand the competitive environment.
– What are the key challenges and strategies associated with global pharmaceutical industry?

About the report

The report provides an exclusive overview of global pharmaceutical industry. It provides authentic past and current performance data for the pharmaceutical industry. The report is a must read for investors, businesses, researchers, and individuals willing to acquire an in-depth knowledge of the world pharmaceutical industry.

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