The finance ministry will soon increase the abatement on MRP based excise duty from the present 35 per cent to 40 per cent, it is learnt. The unsatisfied SSIs are planning to step up their agitation by staging a march in Delhi, this week.
The chairman, central board of excise confirmed to a Confederation of Indian Pharmaceutical Industries (CIPI) delegation in New Delhi that the government was planning to increase the abatement from the present 35 per cent to 40 per cent as a relief measure following stiff opposition from the industry against MRP based excise. The notification on hike of abatement would come out shortly, and it was impossible to rollback the MRP based excise, the senior official clarified to the delegation.
The move has come as a big blow for the SSIs, which has been nursing hopes of a rollback of the decision to enforce MRP based excise duty for drugs.
Reacting to the development, T S Jaishankar, chairman, CIPI said the move was beneficial only to the large and medium companies. "Now the government has made it clear that they don't favour SSIs, and you can close down. We have no options other than to step up the agitation. We are going to conduct a major march in Delhi this week," bemoans Jaishankar.
About 5000 small scale unit owners/representatives from different parts of the country and from all states would assemble in Delhi to participate in the demonstration demanding roll back of the MRP based excise notification, claimed CIPI.
It is to be noted that two weeks ago CIPI had staged a one-day token dharna at Janthar Mandir in New Delhi, participated by numerous SSI units in North India.
"All of us will together march to represent our grievances to Sonia Gandhi, United Progressive Alliance (UPA) convener and the union finance minister P Chidambaram. This will be the largest ever demonstration done by the pharma industry in India," said Jaishankar.
Commenting on the unconfirmed reports on reducing excise duty to 8 per cent for 350 odd drugs under DPCO, he said that the SSIs demand was to roll back the notification on SSIs, and would not compromise on that aspect. Since the SSI units are not making DPCO products, such a move would not be beneficial to the SSI units, said Jaishankar.
CIPI leaders said the options left with the government to save the SSI sector were on three areas. Increase the turnover limit for SSI's from the present Rs 1 crore to Rs 3 crore, reduce the excise duty burden to 8 per cent, or at least exempt small units with a turnover of less than Rs 1 crore from the purview of the excise duty. Earlier, these units were under Section 4 of the Central Excise Act, and duty was paid according to the invoice bills. With the new notification of January 8, these units are also come under Section 4A. The earlier scenario has to be restored to save the SSI drug industry in the country, said the sources.