FEBRUARY 11, 2016

By Vinod Chandra B Vyas, Practising Consultant

ITS beginning of February and we all are anxious about forth coming Union Budget with a single point agenda "What is in it for me?" However on 28 th January 2016 the Ministry Of Finance gave us a crude shock by issuing Notification No.6/2016 Customs dated 28 th January 2016. By virtue of this notification, many prevailing exemptions for Active Pharmaceutical Ingredients (API) as well as Pharmaceutical formulation have been swept away. By enlarge the exemptions were in place for life saving drugs. As far as Central Excise duty exemption is concerned, we need to refer to mega Notification No.12/2012 CE dated 17 th March 2012. In this notification Sr.108 deals with API's and Pharmaceutical formulations. However, for duty exemption eligibility, the notification depends upon Notification No.12/2012 – Customs dated 17 th March 2012 viz. list 3 and list 4 appended to this notification. By issue of aforesaid Notification No.6/2016 Customs dated 28 th January 2016, Ministry Of Finance omitted as many as 75 API's from list No.3 and 4. As a result, many formulations used for critical illness like Cancer will be attracting CVD@ 6% ad Val. Central Excise being an indirect tax, this withdrawal of exemption will certainly result in increase in cost of various pharmaceutical formulations.

In spite of many economic fluctuations in India, the prevailing exemptions were maintained for pretty long time, keeping in view cost effective treatment for various critical ailments. During presentation of every Union Budget, the Finance Minister in his budget speech always gives separate emphasis to Health Sector. Withdrawal of exemption has posed big challenges to the Pharmaceutical Industry. National Pharmaceutical Pricing Authority on one side and such changes by Ministry Of Finance on the other side is like standing between devil & the deep sea.

By this article, we sincerely appeal to the Honorable Finance Minister, to revisit the aforesaid changes and the intentions behind the same. For cost effective treatment to the masses in developing nation like ours, Pharma Industry needs real impetus from the Finance Minister. Netizens must note that such unwarranted changes gives edge to China market over our domestic market. An immediate action is requiredfailing which "Make In India" will be a farfetched dream and the Aam Janata will continue to face the brunt of such lopsided policies.