FEBRUARY 16, 2016

By Lajja Saini, Divisional Manager, Abbott

1. WE (pharma industry) are facing 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.

2. 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.

3. Refund based on self–assessment and certificate issued by chartered accountant can be processed.

4. 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.

5. Interest should be paid if the refund claim is not sanctioned within 30 days of the application.

6. Credit of excise duty must be allowed while in the same group of factories having same PAN.

7. Excise duty on medicines falling under Chapter 30 of the Central Excise Tariff was reducedand current rate 6% there is no corresponding reduction in excise duty on formulations covered by M&TP Act wherein excise is collected by the states. Excise duty and no cenvat credit on inputs which are using in formulations covered by M& TP Act. Current rate of duy is 12.5%. Same should be reviewed in this budget.

8. Physician samples may be exempted from excise duty as they are just two per cent of the total turnover.

9. All life saving drugs should be exempted from Excise duty and customs duty. Life saving medical devices should also be exempted from Excise and customs duty. A waiver of customs duty, excise duty and service tax for capital goods and imported raw materials which is using in life-saving drugs also exempt from central excise duty.

10. Domestic market facing problem/ challenges exist with respect to pricing pressures, IPR, enforcement and data selectness regulation (NPPA). In above to keep the momentum going, taxation and fiscal policies will have to be exempted from central excise duty to attract investment and promote development of the pharma industry.

11. Import of all capital goods, raw materials, consumables, and reference standards for R&D purposes should be fully exempted from Excise and customs duty and others related duties. Import of reference standards should be totally exempted from customs duty, CVD etc.

12. 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 calculating abatement.

13. Capital goods of Cenvat is allowed only twice a year. It should be allowed as is permitted to SSI. Centralgovernment should extend Cenvat credit on R&D equipment and consumables even if the research centre is outside the factory premises.