Harried by the refusal by the Finance Ministry to cut down the excise duty on pharmaceutical products from 16 to 8 per cent, the industry associations are once again planning to press for the same demand through more representations and delegations, hoping for a better deal in the National Pharmaceutical Policy.

"It has been a long standing demand by the industry and we were hoping of a favourable response. After the Parliamentary Committee recommended the reduction of excise duty to 8 per cent, we almost won it. We are not quitting from the effort and will continue to strive stronger,'' said an industry leader.

Though the Parliamentary committee recommended cut in excise duty on all pharma products to 8 per cent from 16 per cent, the Finance Ministry shot down the proposal, as it would result in the loss of revenue by at least Rs 1000 crore. According to the estimates, the excise duty on pharma products comes around Rs 2000 crore every year.

However, the Finance Ministry allowed a similar recommendation by the Parliamentary Committee to extend exemption on drugs to fight cancer and AIDS. "The recommendation on excise duty on pharma products was examined, but it was decided to continue with the existing rates. On the other proposal, the Government has exempted a number of anti-cancer and anti-AIDS drugs and bulk drugs for their manufacturing from excise duty," a government source said.

Though the Chemicals Ministry wanted to support the claim by the industry associations for a cut, the Finance Ministry thought otherwise, as it would prompt a decline in excise revenues and held the opinion that the pharma industry could afford the existing tariffs.

On the other hand, the industry leaders feel that the cut in excise duty would prove beneficial not just to the industry, but to the consumers too. Though it would freeze the price for sometime, it would bring back the revenues for the government as the current migration of manufacturing units to excise-free zone would decline.

Various industry organizations are reportedly in touch with each other after the demand was turned down by the Finance Ministry, even after the Economic Advisory Committee (EAC) took a favourable stand. The organizations are planning to take up the issue again with the concerned Ministries.

Still clinging to hope, the industry also feels that there would be some favourable stand on the part of the Government while announcing the new National Pharmaceutical Policy, which is under consideration of the Group of Ministers. Because, the proposed policy drafted by the Chemicals Ministry also has suggestion to cut down the excise duty.