Inclusion of global spends on R&D and patenting, 200% weighted tax deduction, MAT exemption for life sciences SEZs, provision of 15 to 25% tax on imported products in all government tenders are among the key recommendations of the Association of Biotechnology Led Entrepreneurs (ABLE)) made in its 28 point budget proposals.
Further, ABLE insists on change in listing norms for biotechnology companies to enable access to capital markets. The objective is to drive innovation and revenue-less IP driven companies are given eligibility by SEBI.
In order to realise the Make in India vision, ABLE suggests that all indigenously made biotech products be given 15 to 25% weighted advantage over imported products in all government tenders, said ABLE president Dr P M Murali.
Under the Innovate in India project, ABLE wants the government exemption on custom duty for contract research organisations (CROs) involved in genomic services under Sec-2,b and omit service tax on any activity related to clinical trials under Sec-4,a. There should also be duty exemption on diagnostic kits for infectious diseases under Sec-2,h, and Sec-2,I. The government should ensure that no VAT, CST levy on paediatric vaccines as per Sec-3,a.
The amendment pertaining to 200% weighted tax deduction alone will drive innovation in an exponential way. The sector is denied 2 years of tax holiday on account of regulatory gestation which negatively impacts return on investment, he added.
The government in its agenda has declared the creation of an innovation fund of Rs.10,000 crore. Now ABLE recommends that the R&D cess be utilised to create this fund, said Dr Murali.
Mandating a deduction under Section 35(2AB), ABLE has stated that Indian life science industry is in a nascent stage and any R & D takes time to yield fruits. Considering the long gestation period to break-even and R&D incentives globally offered by other countries, weighted deduction should be increased from 200% to 300%, he noted.
The Association sees the need for the government to create a grant for hiring trainees in skill development programmes and also 50% matching grant for overseas training under Sec-1,C {b, c}.
Along with the Department of Biotechnology (DBT), ABLE has developed a road map for the Indian biotechnology sector which could clock a turnover from the current $5-7 billion to $100 billion before 2025. The current growth has stagnated at 15% year-on-year but the ambition is to grow it to about 30%. States of Karnataka, Telangana, Andhra Pradesh and Gujarat have invested in biotech and indicate growth prospects, he said.