Pharmabiz
 

MoEF to constitute task force soon to bring in clarity on ABS tax

Suja Nair ShirodkarThursday, June 11, 2015, 08:00 Hrs  [IST]

The Ministry of Environment & Forest (MoEF) is soon planning to set up a task force to address the ongoing issues and clear confusion over the implementation of the access benefit sharing (ABS) tax. This strategic decision was taken by the ministry following a detailed meeting with top representatives of Ayurvedic Drugs Manufacturers Association (ADMA) held recently in Delhi.

It is understood that the task force will comprise of two representatives from the MoEF, two from ADMA and one representative from the Ministry of Ayush. Once constituted, the five-member team is expected to submit their detailed interim report on the observation made on the market implication and the effects of the same within four to six weeks to the ministry.

The main aim behind setting up this task force is primarily to gauge the challenges affecting the industry with respect to the ABS tax and bring in clarity on widely debated provisions. A highly placed source from the industry informed that the ministry has clearly indicated that there will be no reprieve to the industry in the form of either bringing in stay over the implementation or exempting the sector, including the small scale enterprises from the ambit of this tax.

It is understood that the government is strongly advocating for the implementation of same, as they believe that levying the tax is essential for the conservation and re-development of the plant raw materials and other natural resources. As per the Act, manufacturers are accountable to share details of the source from where raw material has been procured and share a certain per cent of the revenue generated out of the production to further the cause of biodiversity conservation and its sustainable use.

As of now the companies are required to pay 0.1 per cent, 0.2 per cent or 0.5 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 the industry states that there is a wide-scale confusion 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.

 
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