The ayurvedic manufacturers from all over the country have demanded withdrawal of the 16 per cent turnover-based excise duty on patent and proprietary ayurvedic medicines. They point out that the duty is being levied without considering the practices, concepts and terminologies specific to ayurveda and without a realistic appraisal of the health of the ayurvedic medicine industry.

The ayurvedic companies under the banner of Ayurvedic Medicine Manufacturers Organisation of India (AMMOI) have already communicated this demand to the Union finance minister. The association has also asked its members to write individual letters citing the burden on ayurvedic industry, sources told Pharmabiz.com.

AMMOI feels that the concept of generic/patent/proprietary medicine as applied in allopathic medicines has been adopted in formulating the policy to levy excise duty on ayurvedic medicines.

According to Dr D Ramanathan, general secretary, AMMOI, a patent/proprietary medicine in the allopathic system is an active ingredient or a formulation protected by rights to use the manufacturing technology, synergy or drug delivery system, considering the nature of the invention that resulted in introducing the product. Others cannot manufacture such patented medicines unless the inventor grants license. On the other hand, a generic medicine in the allopathic system is identified by the chemical formula and is open to all for manufacture and sale.

As against these, patent/proprietary medicine in ayurveda mean that its composition is in variance with the composition prescribed in the ayurvedic text books, and is termed as generic ayurvedic medicines. However, these drugs are not protected on rights of invention and anyone is open to make and market such drugs, irrespective of whether patent/proprietary or generic.

For example, in the case of Karpooradi oil, one of the ingredients is camphor. If the proportion of camphor is the same as prescribed in the textbook, the medicinal oil comes under generic category. If camphor content is more than the prescribed quantity or less, the medicinal oil becomes a proprietary product and becomes liable to the sixteen per cent excise duty. The buyer may not pay more, as this does not add value to justify the increased cost due to imposition of levy, notes Ramanathan.

The 16 per cent excise duty is being levied based on misleading definition of patent/proprietary medicines. Many court verdicts so far favour the ayurvedic manufacturers on the question of what is an ayurvedic drug and whether the definitions of proprietary/generic/patent are applicable to ayurvedic medicines similar to allopathic drugs. Further, there is no definition of ayurvedic medicines in the Central Excise Act 1944, says Ramanathan.

He feels the government should have a sympathetic view towards the ayurvedic industry. This industry should not be equated with the highly developed allopathic drug industry, which is considerably bigger in terms of turnover. The current developmental budget allocation for ayurveda is a mere Rs.196 crores as against the allocation of Rs.8,000 crores for the allopathic sector, which is just 2.5 per cent of the allocation to the allopathic medicine sector.