– Daara Patel, Secretary General, Indian Drug Manufactures Association
The pharma industry faces a huge problem due to the inverted duty structure, i.e. higher duty on inputs at 12 per cent and lower duty on final products (six per cent) and the resulting accumulation of ever mounting cenvat credit. Hence, we request that parity be introduced in the input/output rates of excise duty for pharma products. Pharma exports should be allowed to be cleared at marginal rate of duty (12 per cent as on inputs). This would benefit the pharma exporters at no loss or burden to the exchequer and domestic market.
- Utilisation of cenvat credit for payment of service tax on reverse charge basis must be allowed. Easy and prompt
- refund of accumulated credit must be allowed under Rule 5 of cenvat credit rules.
- Refund based on self?assessment and certificate issued by chartered accountant can be processed.
- Scrutiny of refund claims should only be for issue-based cases and that is required to be made only after the
- sanction of the refund claim.
- Interest should be paid if the refund claim is not sanctioned within 30 days of the application.
- Credit of excise duty must be allowed while in the same group of factories having same PAN.
- Physician samples may be exempted from excise duty as they are just two per cent of the total turnover.
MRP abatement of 35 per cent should be increased to 45-50 per cent. Industry was advised to provide reworking justifying increase of abatement.
Industry emphasised that expired goods and distribution cost should be taken while
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calculating abatement.
Capital goods of Cenvat is allowed only twice a year. It should be allowed as is permitted to SSI.
Exemption limit for small scale industries be raised to Rs 10 crores.
Endorsement of bill of entry should be restarted as in pharma industry the loan licenses are very common.
Credit should be allowed for service provider.
There is disparity in the rate of interest payable by the taxpayers (@ 18 per cent) and the refund by Government (only @ six per cent) needs to be removed to encourage efficient tax administration. Customs authorities are denying exemption from bank guarantee in respect of advance authorisation where jurisdictional excise authorities have issued an order in original and matter is under sub-judice. In such cases exemption from bank guarantee should not be denied when the matter is under sub-judice.
- All life saving drugs should be exempted from customs duty.
- Life saving medical devices should also be exempted from customs duty.
- Basic customs duty on formulations should be reduced to five per cent.
- Import of all capital goods, raw materials, consumables, and reference standards for R&D purposes should be
- fully exempted from customs duty and others related duties.
- Import of reference standards should be totally exempted from customs duty, CVD etc.
Direct taxes
IT circular disallowing expenses as gifts, conference visits etc. for doctors should be prospective and defined clearly.
Weighted deduction should be increased from 200 per cent to 250 per cent under 35(2AB).
All expenses including clinical trials, land and building expenses on actual bases must be allowed as weighted deductions under R&D.
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