The Association of Biotechnology Led Enterprises (ABLE), in its budget proposal, has demanded total exemption of excise and custom duties on consumables and capital goods of biotechnology industry. The Association has also demanded total exemption of taxes for raw materials used for manufacturing life saving drugs and diagnostic kits, besides total exclusion from the ambit of VAT and CST for paediatric vaccines.
In its 24-point recommendations for the Union Budget 2013, the Association said that going by the challenges faced by the biotechnology industry, which is current a Rs.30,000 crore sector, there is need to give a fillip and tax cuts will be the way forward.
Further, it has also called the government to provide tax holidays for indigenously developed biotech drugs. “Now with the government of India releasing the guidelines for biosimilars in July 2012, special incentives for the industry in the form of tax holiday of up to 10 years on undistributed profits are required. Several countries are mandating manufacture of drug products to be eligible for participation in government tenders and for tax exemptions extended to local companies. When India is home to a well-known biotech drug industry manufacturing medicines for cancer, diabetes, HIV, malaria, and hepatitis, there needs to be an affordable factor which can be brought in with exemption of value added tax (VAT and central sales tax (CST) on paediatric vaccines among others,” ABLE said in its Budget 2013 proposals.
The association recommended that the weight tax deduction should be increased from the current 200 per cent to 300 per cent with a validity of 10 years along with its applicability extended to outsourced clinical trials and R&D. It also demanded to set up venture capital funds, grants for advanced skills development programmes, exemption from excise/ custom duties on life saving medicines as well as on their raw materials and also on capital goods and consumables.
It also recommended that weight tax deductions should be applicable to outsourced clinical trials and R&D, preparations of dossiers, foreign consulting/legal fees for NCE (New Chemicals Entities) and ANDA (Abbreviated New Drug Applications) filings with the US FDA and patent defending charges. As the biotech sector is facing a serious crunch of young talent, ABLE wanted the government to allow grant for hiring trainees in skill development programs and also 50 per cent matching grant for overseas training.
“There is a need for financial thrust for the emerging biotech sector and the government will have to play an important role in giving the required financial push to this sunrise sector. We see that only if the government gives a much needed boost only then the sector will be able to compete at a global level,” said Dr PM Murali, president, ABLE India.