The representatives of major pharmaceutical industry associations have termed the accusation of Confederation of Indian Pharmaceutical Industries (CIPI) on the alleged role of Indian Pharmaceutical Alliance (IPA) in influencing the government to introduce MRP based excise duty regime as absolutely baseless.

According to members associated with Organisation of Pharmaceutical Producers of India (OPPI) and Indian Drugs Manufacturers Association (IDMA), there is no truth in the allegation as all industry associations including IPA have opposed the government decision. "Every association has expressed its protest in the decision. How come somebody can blame the major players for a decision that can affect every drug company," they ask.

In fact, the issue of MRP based excise duty assessment and the percentage of abatement that should be allowed have been under the ministry's consideration for years now. Industry associations say that they had been making representations before the finance ministry for the last several years. "Linking the issue of huge trade margins and the excise ministry notification is another mistake. The trade margin issue popped up just recently after the activist role played by Ram Vilas Paswan, the chemicals and fertilizers minister. But the excise matter was pending before the finance ministry for a long time, they say.

Industry association representatives said that the immediate agenda before them is to convince the ministry on the need for a change in the current excise assessment norms. "Now that the government has decided that drugs are to attract 4 per cent duty under VAT, the abatement factor should be reconsidered urgently. There should be at least 60 per cent abatement given to the industry," they said.

The industry associations are to meet the union finance secretary on January 20, 2005.