Perturbed over the intention of the Union Finance Ministry's recent questionnaire to pharma SSIs on data for giving separate abatement, the Punjab Drug Manufacturers Association (PDMA) has urged Prime Minister Dr Manmohan Singh to implement the Economic Advisory Committee (EAC) recommendations on abatement.

The EAC had recommended 60 per cent abatement against the present 42.5 per cent abatement. Similar request has also been made by Confederation of Indian Pharmaceutical Industries (CIPI), an organisation of more than 5000 small pharma companies in the country.

In a letter dated May 15, PDMA president Jagdeep Singh urged the Prime Minister to implement the EAC recommendation without much delay as the SSIs cannot provide the data asked by the department of revenue (cost) of finance ministry for various reasons.

Without mincing words, the PDMA president said that the Finance Ministry's unusually long and cumbersome questionnaire will only help complicate the matter further. "After rejection of PM approved EAC recommendations and earlier those of Dr Pronab Sen, SSI Units wonder if data provided by them is of any consequence in comparison to the importance of PM and C&F Minister" the letter said.

Casting doubt on the intention of the Finance Ministry by asking for data from SSIs for giving separate rate of abatement to SSIs, the PDMA letter said, "SSI apprehension that such questionnaires are designed to complicate the issue is reinforced by the fact that earlier data was also sought in a simple format on 2 Nov 06 (copy attached) which was furnished by us. Another form for data sought is also attached. Latest data is sought in six pages. While considering C&PC request for 80 per cent abatement for SSI in Abatement Committee Meeting of 14 Nov 2006, it is clearly mentioned in para 4 (copy attached) that 'for fixing of abatement the only factors which need to be taken into account are trade margins and taxes'".

"There is no need of providing data once again as the EAC recommendation was made after a detailed discussion between the secretaries of departments of revenue, chemicals and EAC", he said when contacted.

Terming the MRP-based excise as counterproductive, the letter said, "When vital issues like loss of revenue and price rise of medicines adversely affecting the common man are overlooked to continue a counterproductive policy which benefits only large industry, SSI has reasons to believe large units are in control and furnishing data is futile. SSI cannot migrate and recover investment by 2010 when GST is to be levied".

There are also apprehensions about the honesty of Finance Ministry as the letter wonders that without any data how it has increased the abatement from 35 to 40 per cent. "Cumbersome data has no meaning when there are no Rules of Abatement. Initially abatement was fixed at 35 per cent and later increased to 40 per cent without any data", the letter said.

To justify its claim that the MRP-based excise is killing the SSIs, the letter says "to illustrate the travesty of justice, attached is a CA attested certificate whereby a company has paid excise duty of Rs.4.30 lakh (in PLA) in 2004-05 which increased to Rs.12.38 lakh in 2005-06 despite decrease in sale from Rs156.90 lakh to Rs. 136.45 lakh upon levy of MRP based excise. This is after availing the so-called SSI exemption limit of Rs one cr. "