CEO-SPEAK
Atul Sobti
CEO & MD, Ranbaxy Laboratories Ltd
Incentivise R&D
We suggest removal of the excise duty on all essential drugs. In order to encourage R&D, the incentive of weighted deduction of 150 per cent needs to be doubled and extended by another 10 years. Since all R&D cannot be done in-house, certain essential costs incurred outside tax-approved facilities should qualify for the deduction. We need to ensure that the overall tax burden on companies which have committed capital investments in SEZs and other notified backward areas should not increase through a change in MAT provisions and withdrawal of tax incentives.
CHAMBER SPEAK
CII Excise duty on medicines falling under Chapter 30 of the Central Excise Tariff was reduced from 16 to 8 per cent in March 2008 and further to 4 per cent in December 2008, but there is no corresponding reduction in excise duty on formulations covered by M&TP Act wherein excise is collected by the states. Excise duty on such medicines should be reduced to 8 per cent.
EXPERT VIEW
The government should extend the 150 per cent weighted deduction with respect to expenditure incurred on R&D beyond March 31, 2012; and broaden the definition of R&D expenditure to include expenditure incidental to research carried outside the R&D facility. The excise duty reduction of 4 per cent on medicines should be continued.
Sujay Shetty
Associate director - Pharma & Life Sciences Practice, PricewaterhouseCoopers