The Pharmaceutical Export Promotion Council (Pharmexcil) has urged the Commerce Ministry to extend the DEPB scheme beyond the current deadline and extend tax benefits to the export oriented units, among a series of measures suggested to help the phama exporters tide over the adverse impact of the global recession.
As per the existing order, the DEPB scheme will be operative till December 31, 2010 or till a replacement scheme is announced, 'whichever is earlier'. However, the Pharmexcil, in its charter of measures submitted to the commerce ministry after consultations with the stakeholders, has urged the government to extend the scheme till a replacement scheme is announced, irrespective of the current deadline.
In the case of brand promotion, the agency has suggested duty free license upto 10 per cent on FOB value of a particular branded export product (not generic) which has generated more than Rs one crore during the financial year. The Pharmexcil also called for extension of income tax exemption under Section 10B of the Income Tax Act to the EOUs upto 2014. Currently, the scheme is open till March 31, 2011 and available for 10 consecutive years.
"Under the direct taxes code, area based exemptions are not available and therefore there is an ambiguity whether SEZ units are eligible for 100 per cent tax exemption. Existing EOUs even if they decide to migrate to SEZ, then shifting and building up a SEZ unit will take at one year. Site inspection by the drug registering authorities from the buyer's country will take another one year. Registration of products will take further one year. In view of these practical difficulties and to support the existing EOUs besides ensuring uninterrupted exports, for a smooth transition from EOU to SEZ, it is suggested that the operating period should be extended to 15 years for availing tax benefits," the Pharmexcil note said.