The Confederation of Indian Pharmaceutical Industries (CIPI-SSI) has sought Prime Minister's intervention in solving their longstanding problems related to MRP based excise duty and migration of business to excise free zones. The CIPI has brought to the PM's notice the increasing number of advertisements placed by manufacturers from excise free zones inviting companies to outsource drug production from them to save excise charges.
According to a CIPI representation made recently to the PM, there are about 46 advertisements in a local drug index on the loan licensing opportunities that exist in excise free zones today. The association terms this as a new phenomenon as there were no such advertisements before the announcement of the changes in excise duty calculation. "To explain the situation, 16 months after it was levied, there are 46 advertisements inserted in a single periodical. At the time of levy, it did not carry even a single one, and the last issue had 17 only," it stated.
Pharmabiz had recently reported about this development happening in excise free zones. It had also pointed out that such advertisements are talking about "100% excise exemption and 75% CST advantage." In its latest representation to PM, Lalit Kumar Jain, vice chairman, CIPI said that if the situation continues without change, over 5,000 SSI units in non-excise exempt states would be closed down soon. The representation also contained copies of similar plea made by the constituent associations of CIPI from states like West Bengal, Punjab, Gujarat and Andhra Pradesh.