Ayurveda industry expressed strong discontent over the use of MRP based assessment with 35 per cent abatement for branded medicaments used in ayurvedic, unani, sidha, homoeopathic (AYUSH) systems, stating that it will only jeopardise the growth prospects of the industry, economically burdening it further.
With a view to ensure fair growth opportunity for the industry, the industry wants the government to increase the fixed abatement percentage from 35 per cent to 50 per cent, since many feel that it will be difficult for the manufacturers to cope up with the additional expense. During the union budget the FM had announced that henceforth, to reduce the valuation disputes relating to branded medicaments, MRP based assessment on fixed abatement of 35 per cent will be adopted for all the Ayush based branded medicaments.
The Gujarat Ayurvedic Aushadh Manufacturers Association (GAAMA) pointed out that it is highly disturbing on how the government has completely overlooked the representations sent by the industry on this cause which demanded exemption of the ayurveda, siddha and unani (ASU) industry from excise duty. Prabodh Shah, president, GAAMA stressed that ironically, instead of addressing their issues the government has further added to their woes by adopting the MRP based assessment.
As of now the ASU industry is liable to pay six per cent excise duty on patented and proprietary medicines, whereas two per cent excise duty on generic ayurvedic products. ASU associations across the country have been demanding abolishment of the excise duty altogether for protecting the interest of the traditional medicines system in the country.
Though there has been no direct hike in the excise duty, the use of MRP assessment with 35 per cent abatement have lead to almost two to three per cent hike in the tax, further burdening the manufacturers. Prior to the use of MRP assessment there was no fixed ceiling on abatement, Shah informed that the manufacturers was liable to pay the duty based on their sales which could vary between 40 to 45 per cent making the abatement percentage to vary between 50 to 55 per cent.
But with this announcement all the manufacturers will have to pay the excise duty on fixed percentage rather than on the sales they make.“We are really concerned over the future of the Indian traditional medicines under such stringent conditions. This sector consist of small scale manufacturers thus burdening them with additional taxes is actually equivalent to killing the industry slowly as most of the companies will not be able to deal with the additional costs,” Shah informed.
He further stressed that considering the current volatile situation of the industry it is mandatory of the government to take strict action on this mater at the earliest.