The Ayurvedic Drug Manufacturers' Association (ADMA) has urged the Department of Ayush to exempt the Ayurveda, Siddha and Unani (ASU) industry from the Goods and Service Tax (GST) which is expected to be implemented by the union finance ministry from next financial year.


ADMA has recently submitted a representation to the Department of Ayush urging the department that the ASU drug manufacturers should be classified in the exemption category of GST so as to help the industry to grow and avoid cascading effect of taxes on the nascent industry.


The GST that is expected to be implemented soon across the country could have multiple rates based on the classification of goods like goods to be listed under the exempted category, goods which would attract lower rate and goods qualifying for standard rate etc. However, Chandrakanth Bhanushali, general secretary, ADMA, points out that this concept of multiple rate under the GST regime for the first two years could impact the business model since ASU industry typically involves cultivation and collection of medicinal herbs which are processed and converted into final formulations and then sold in the local and export market.


Bhanushali informed, “ASU industry is a very small industry with only 9000 manufacturing units in the country of which hardly 100 have large scale units with turnover of Rs.150 crore. Whereas the rest falls under the small scale and micro units with a turnover of only Rs.25 lakh per annum. It will be too much burden for them to follow the GST as well as the current tax regimens.”


He further added that there are many small scale and micro level units in India which needs government support to come up. However he stressed that with so many taxes and very less turnover it will not be possible for them to grow.


Currently only the classical products of ASU drugs have no or zero excise duty, whereas the manufacturers of proprietary ayurvedic medicines are paying 4 per cent excise duty at present.


“We already have too many problems in our hands and cannot take the burden of the GST regime along with the excise duty since it is sure to impair the industry. For almost 17 years i.e. since 1994 we are paying excise duty on proprietary ayurvedic medicines. We have already requested the government to exempt entire Ayush sector from the burden of excise duty because it is actually hindering the growth of the industry than doing any good. The industry would not be able to handle the combined pressure of the excise duty and GST,” he said.


Sources point out that as of now the Ayush sector needs impetus and strong support and help from the government so that it can get recognised both at the domestic as well as at international level. However the implementation of such tax regimens will only slow down the whole process since with the implementation of GST the ASU manufacturers will have to pay 10 per cent as tax to the government which will be a huge blow to the still growing sector.