Medical devices industry urged the government to take immediate steps on the issue of applicability of concessional duty on import of medical devices. Experts stress that lack of clear stand on this matter by the ministry of health and the department of pharmaceutical is leading to a bureaucratic logjam, preventing the revenue department from taking any concrete measure.

The medical device industry has been for a very long time demanding the government to withdraw the concessional duty notification that requires importers to pay only 0 to 5 per cent import duty on medical devices. Industry expert and forum coordinator of AIMED, Rajiv Nath pointed out that this notification has been hitting the interest of the $5 billion domestic medical device industry as it has led to India becoming a dumping ground for cheap and low quality medical devices.

He cautioned that it is high time the government rationalized the skewed and lopsided inverted duty structure. This situation is creating unfair market conditions slowly killing the domestic industry, as many domestic units are also resorting to imports. Nath said that the DoP has written to the revenue department as it is convinced that the concessional duty is damaging the sector and seeking corrective measures to prevent it further.

“What is striking is that in spite of all this, the government has failed yet again to specify what steps needs to be taken to ensure otherwise. It is high time that the government comes clear on what they actually desire for the industry so that we can finally take a call on. The revenue department claims that they are helpless under this circumstances, until and unless the DoP and MoH takes a stand and give them a clear signal,” Nath said.

Once the duty is withdrawn, the status of concessional duty will fall back to its earlier 10 per cent, which was the previously implied duty on the import of medical devices. Experts point out that major impediments such as irrational tax structure need to be removed by withdrawing all concessional duty notifications on basic duty and SAD. As they fear that unless tax anomalies are removed, manufacturing of medical devices in India will not really take off.