The government has extended the 30 days exemption of excise duty also to the batches of essential medicines, whose prices were revised in July, August and September by the National Pharmaceutical Pricing Authority (NPPA) as per the new Drug Price Control Order (DPCO).

Earlier in July, the Finance Ministry had given this exemption for repacking and relabeling to the first batches of scheduled drugs whose prices were fixed in May and June, after implementing the new DPCO that mandates the NPPA to bring in the essential medicines under the price control ambit. As per the DPCO, the window period given to the manufacturers to effect the new prices was 45 days.

“The Department of Pharmaceuticals (DoP), on being satisfied that, it is necessary in the public interest to do so, extends the period of validity of exemption for a period not exceeding 30 days from the date when the period of 45 days expires, as granted by Department of Revenue, for the above said purpose in respect of price notifications dated 22.07.2013, 21.08.2013 and 20.09.2013 issued by NPPA,” said a notice by the DoP.

“The aforesaid extension of exemption shall be applicable only for the purpose of exemption from the provisions of Central Excise Act regarding whole of the duty of excise leviable in case of re-printing, re-labeling, re-packing or stickering, in premises which is not registered under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder. The above is without prejudice to the provisions of DPCO, 2013 in respect of compliance and implementation of revised ceiling price as per price notifications issued by the NPPA,” the order said.

The Department of Revenue on July 29 had issued the notification giving 30 days additional time to the manufactures of formulations whose prices were revised on May 15 and which were subjected to re-printing, re-labeling, re-packing or stickering, in pursuance of the provision contained in the said DPCO 2013 from whole of the duty of excise leviable thereon under the said Central Excise Act.

There was confusion and also apprehension among the companies on whether they should be asked to pay excise duty once again on the formulation packs which were sent out of the factories and need to be repacked. The order has come as a relief to the manufacturers of scheduled formulations.