In a pre-budget memorandum to the union finance minister, the Ayurvedic Medicine Manufacturers Organisation of India (AMMOI) has sought abolition of two per cent excise duty imposed on ayurvedic products in order to protect the traditional treatment system in the country.

In the memorandum, AMMOI general secretary Dr D Ramanathan said an excise duty at a rate of two percent on ayurvedic medicines will force the system go out of reach of the common man, and the levy would become detrimental to the growth of the industry further. He noted in his memorandum that government of India in its budget 2012-13 had doubled the excise tax from one percent, the tax slab introduced in the previous fiscal year.

Dr Ramanathan argues that in the year 1997, following a representation by the manufacturers, the then finance minister P Chidmabaram had assured the parliament that no excise duty would be levied on ayurvedic medicines manufactured as per the guidelines of ayurvedic pharmacopoeia. He said the statement of the minister came in Parliament because of the intervention of ayurveda industry on the imposition of one per cent excise duty on ayurvedic medicines in the budget in 1997. Even though the finance minister had allayed all concerns of the industry and guaranteed that no excise duty would be levied on, the central government introduced 1 per cent excise duty in 2011-12 and it was raised to two per cent in the next budget.

Speaking to Pharmabiz, he said the hike in excise duty has already affected the ayurvedic industry adversely. Unless the government interferes positively in the matter, the Indian systems of medicines that have been prevailing in the healthcare scenario from time immemorial will totally cease to exist in the country. The AMMOI secretary requested the members of Parliament from Kerala to intervene in the matter and bring the issue to the attention of the prime minister.

Urging the government to reconsider the issue of this unfair taxation, the manufacturers association said its demand for withdrawal of excise duty on ayurvedic medicines should be viewed against the backdrop of shortage of raw materials and increases in their prices, rising labour cost and decline in the availability of skilled workers. The memorandum argued that there was a need to abolish the duty because the industry is currently not in a position to withstand the burden of taxation which might curtail the very growth of the age old system.

According to AMMOI, all over India there are 8000 manufacturing units for ayurvedic medicines, out of which 5000 units have well equipped GMP facilities with a turnover of Rs.8000 crore. The memorandum to the government also mentions that the central Ayush department had also requested the finance ministry to consider the demand of AMMOI for the sake of the country’s traditional healthcare system.