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Chemicals ministry seeks fresh list of life saving drugs for duty exemption in the budget
Our Bureau, Chennai | Thursday, January 2, 2003, 08:00 Hrs  [IST]

In a move to exempt more life saving drugs from customs and excise duties, the Union Ministry of Chemicals and Fertilisers (MCF) has asked the Finance Ministry to draw up a new list of life-saving drugs for which duty exemptions can be recommended. According to MCF, the new list should be drawn on the basis of the life saving nature of a drug and without any reference to where the drug is manufactured.

The Finance Ministry has a list of life saving drugs drawn up by the Ministry of Health and Family Welfare. The existing list in the custom tariff is restricted to only imported drugs. It is reported that the Finance Ministry would draw up the new list of life saving drugs in tandem with the Ministry of Health and Family Welfare.

MCF has categorically mentioned that if a drug is identified as a life saving drug it should not be subjected to customs and excise duties thus ensuring zero tax. It has also mentioned that if exemption is not feasible the incidence of duties should be equal on this category of drugs.

MCF has called for rationalization of taxes on some of the drugs. It has asked for exemption of 16 per cent excise duty for two life saving drugs, iopamidol and iohexol in order to provide a level playing field for indigenous manufacturers. Further it has also sought complete exemption of excise duty on D2ABT, an in process raw material for the anti TB drug, ethambutol. Lupin Laboratories, the manufacturer of the drug, had presented this case to the MCF.

On behalf of Eli Lilly and Co, the MCF has recommended that as far as drotrecogin alfa (activated) sold under the brand name Xigris is concerned no excise and custom duty be levied on the product if it is found to be of life saving nature. If the same cannot be done, the MCF has requested for an additional duty equivalent to the excise duty be levied. The same process has also been sought on somtropin, gemcitabine, tobramycing, dobutamine and vancomycin.

MCF has also asked the Finance Ministry to consider exempting cyclosporine formulation from excise duty if the same is found to be of life saving nature.

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