Biotech sector cries out for tax breaks
FICCI calls for removal of import duties on research equipment and exemption from service tax for clinical trials, reports Narayanan Madhavan.india Updated: Dec 24, 2006 23:40 IST
Clinical trials need income-tax deduction, and the import of laboratory consumables must be eased up to help innovations in biotechnology. This will create one million jobs and $5 billion (Rs 22,500 crore) in revenues, said a FICCI statement on Sunday. Clinical trials by companies are currently not accepted for a weighted tax deduction of 150 per cent under Section 35 (2AB) of the Income Tax Act that covers scientific research.
“Since expenditure incurred on scientific research is allowed, there is no reason why it cannot be extended to clinical trials as well,” the statement said. Low-cost laboratory trials by Indian scientists to help western drug firms is considered by industry experts to be an effective strategy for Indian firms to boost their global presence in the industry, in much the way elementary coding promoted Indian software companies that later grew up to develop high-profit businesses.
|• Blanket permission for biotech, pharma and clinical research firms to import non-hazardous consumables used for research within a limit of Rs 1 crore|
• A comprehensive removal of import duties on equipment used in biotechnology and medical research, and an exemption from service tax for clinical trials
FICCI suggested biotech, pharmaceutical and clinical research companies may be given blanket permission by the government to import non-hazardous consumables used for research within a limit of Rs 1 crore. It also called for technical help at airports and ports to enable customs officials deal smoothly with issues related to biological material.
It also called for a comprehensive removal of import duties on equipment used in biotechnology and medical research, and an exemption from service tax for clinical trials. “Service tax would be an additional high impact cost to the nascent Indian clinical trial industry and a huge deterrent, especially at a stage where India is facing increased cost competitiveness from countries in Latin America, Eastern Europe and China,” the statement said.FICCI also called for excise and custom duty exemptions to promote bio-diesel and ethanol as auto fuels, with the equipment used to make them included as well.
First Published: Dec 24, 2006 19:25 IST