» Business » Exempt all life saving drugs from GST

Exempt all life saving drugs from GST

March 02, 2012 18:28 IST
Get Rediff News in your Inbox:

The Indian Pharmaceutical Industry employs over 4.2 million personnel, both in manufacturing and ancillary sectors. India is ranked 3rd largest country in terms of production volume and 14th in terms of value with 10% of World's Production but only 1.5% of Value.

Indian Drug Manufacturers Association (IDMA) has been in the forefront actively supporting Ministry of Health & Family Welfare is compiling and bringing out the Indian Pharmacopoeia for many years and also continues its whole-hearted support to the Indian Pharmacopoeia Commission (IPC) in its activities.

In its pre budget memorandum, IDMA has proposed to the government to implement GST and to increase the total tax rate for Pharma industry. They have also asked to exempt all life saving medicines from GST. In order to promote and support the growth of SSIs, a higher threshold limit of Rs 10 crore has been proposed by the association for SSI Units under GST. IDMA have requested to discontinue the 2% CST on interstate transfers in order to reduce transaction costs.

IDMA has recommended that Exemption Limit for Small Service Providers should be increased from Rs 10 lakh to Rs 25 lakh. Further, it has also proposed that exemption to be granted in regard to packaging services carried out on job work basis and also an abatement of 60%-70% may be granted to manpower recruitment and supply service.

IDMA has proposed to reduce the Excise rate of Active Pharmaceutical Ingredients (API) from 10% to 5% and all excisable goods used for R&D purposes, to be exempted from Central Excise Duty as also import of all capital Goods, raw materials, consumables, & reference standards for R&D purposes must be fully exempted from Customs Duty & other related duties.

Pharma companies having their own approved R & D facilities have to get Bio-Equivalence Study through outside agencies before they launch their products in the market.

Going on, IDMA has requested that the Basic Customs Duty on Formulations should be rationalized and reduced to 5% and also import of Reference Standards should be totally exempted from Customs Duty, CVD etc.

Get Rediff News in your Inbox:
Powered by