Faced with sharp division among the members over the issue of withdrawal of tax exemption to contract manufacturers in excise-free zones, the Confederation of Indian Pharmaceutical Industry said it wanted to take a neutral stand over the issue. It would seek to address the growing chasm between the two sides at the meeting scheduled to be held in Kolkota on August 12.

``We understand how the units outside the excise-free zones are suffering due to various problems and we do not know how many have closed down operations now. At the same time, around 1000 units have made investments in the excise free zones too. The leadership hence would like to take a neutral stand,'' CIPI president T S Jaishankar said.

Meanwhile, Tamil Nadu chief minister M Karunanidhi has agreed to help the small scale sector by intervening in the issue of withdrawing the tax exemption to the contract manufacturers. He would be meeting the union government officials to ensure level playing field to the struggling small scale pharma units outside the excise free zones.

CIPI president has recently written to the members explaining the clash of interest between the manufacturers in the excise free zones and non-excise free zones and sought the suggestions to keep them together to avoid a split.

Jaishankar said he would make sure that both the sides attend the crucial meeting in Kolkota and discuss the matter in the wider interest of the industry.

Trying to keep a neutral stand in the fight, he said the CIPI did not endorse the meetings of its committee members with the union government officials and their representations in favour of the excise free zones. He also criticised the mobilization of funds to campaign against any legislation that would go detrimental to the zone.

Meanwhile, a leader from the side representing the zone said they had already written to the CIPI president seeking that support of the confederation as there were only a few units now outside the excise free zones and any change in the present excise duty laws would affect the entire small scale sector.

On the other hand, those fighting for the struggling units outside the zone claimed that the CIPI should stand by the weaker side. There are still thousands of units outside the excise free zone facing lot of problems. Hence, it is the duty of the CIPI to help the struggling members rather than those already enjoying the benefits, a leader of the rival side said.