Seeking clarity on the issue of access benefit sharing (ABS) under biological diversity act and its impact on the industry, the Ayurvedic Drug Manufacturers’ Association (ADMA) recently met with the industry members from Nagpur. The meeting was strategically done in the presence of the representative from the Maharashtra state biodiversity board.
The main aim behind this meeting was not only to gauge the reactions of the companies on the same, but also project their problems to the government representatives in the process. Interestingly, the Association plans to meet the ASU manufacturers from all over the country so as get a better understanding of the industry issues and challenges, before taking any decisions on this matter.
Industry sources pointed out that apart from bearing the brunt of paying hefty ABS to the government, the industry is also reeling over the fear of constant harassment from various state government authorities over the payment of levy. The confusion is over whether the ABS needs to be paid in each of the states from which the bio resource has been procured or only in the state of the manufacturing facilities. As of now the companies are required to pay.1 per cent, 3 per cent or 5 per cent tax based on their annual turnover or 1 per cent, 3 per cent or 5 per cent on the cost of the bio resources procured.
However, their biggest bone of contention is lack of clarity over who is the competent authority to pay the tax. A highly placed source from ADMA stressed that it is high time that the government needs to come clear on this as the draft guidelines on ABS under biological diversity act do not seem to consider the impact of the ABS mechanism on ASU and herbal sector, which is creating an unfavourable market condition for ASU manufacturers. Industry insiders stressed that the act is very vague on explaining key factors like who will be the authority to collect taxes, or on which products will the taxes be collected. While at the same time, keen on black listing and harassing the industry members.
Similarly, industry also raised their concerns relating to normally traded as commodity (NTAC). Under Section 40 of the BDA 2002 (18 of 2003), the Central Government, in consultation with the NBA, proposed that a list of 190 items of biological resources will be exempted from the NBT tax provided that they are traded as commodity. However, ADMA pointed out that the industry should be exempted from paying the above even if the same are used for value added products.