The SME Pharma Industries Confederation (SPIC), representing the majority of small scale units, has strongly demanded raising of pharma SSI exemption limit to Rs 5 crore in the coming budget at any cost to support the ailing sector.

In a revised memorandum to the Department of Pharmaceuticals in response to the call for suggestions to be forwarded to the Finance Ministry and to be included in the next budget, the SPIC has pointed out that the Department of Revenue which stalled the proposal for increasing the SSI exemption limit for two years cannot do the same any more.

“Pharma cannot be rated at par with other service providers who neither regulated nor covered under price control. The DOR has no qualms in losing crore of rupees annually by adamantly holding on to the anomalous MRP excise to extend benefit to the units in excise free zones. But now, the 5000 SMEs are more important and they need to survive after being victims for five years,” the representation said, urging for the immediate clearance of the proposal.

The SPIC also reiterated their earlier demands including the inclusion of pharma industry in the lowest slab as in case of precious metals when the Goods and Service Tax (GST) will replace the excise duty from April 1, 2010. The association also called for amalgamating different taxes into GST to save time and energy. All types of forms (C, H, etc) and road permits for transportation from one state to another should be scrapped with levy of GST. Rates of GST and State GST should be kept uniform for all states and the filing procedures should be simple and transparent to enable filing by SMEs themselves without support from CAs, which are additional cost for no reason, it said.

The anomalous fiscal policies coincided with implementation of Schedule M which mandated upgradation at an enormous cost at a time when SMEs were rendered redundant owing to MRP excise. Schedule M has escalated the cost of setting up a moderate sized SME unit to Rs 20 crore. Hence no new SME units have come up in the last three years except in Excise Free Zones, simply because they are enviable. An SME entrepreneur cannot repay loans given the small turnover of the business. The number of Pharma SMEs has reduced drastically. If SMEs are not protected, it will be handing over the entire local market worth Rs 50,000 crore to MNCs. India cannot forget that prior to advent of SMEs in 1960, prices of medicines in India were highest in the world, the representation said.