Chandigarh's small pharma units feel excise sops heat

With the migration of pharmaceutical units to the excise-free zones of Himachal Pradesh, Uttaranchal and Jammu and Kashmir, prices of medicines manufactured in other states have gone up, thereby threatening the small-scale industry of the region.

Added to this, the policy of levying excise duty on the medicines based on maximum retail price (MRP) has brought the pharmaceutical industry to collapse, according to Confederation of Indian Pharma Industry (Small Scale).

"We have no option except either to close shop or move to some tax free zone,"said Jagdeep Singh, Coordinator, Confederation of Indian Pharma Industry (Small Scale) in Chandigarh today.

With a number of pharmaceutical manufacturing units already operational in the hill states, there are also a good number of companies, sourcing their products from these areas which according to the Confederation of Indian Pharma Industry (Small Scale) is working against the spirit of the tax concession provided by the central government.

Alleging that many companies located outside the excise free zones are getting it packed from these zones and selling it under the garb of "contract manufacturing".

"Forty six advertisements for contract manufacturing appeared in the current quarterly issue of "Drug Today" alone when there were none a year ago when MRP based Excise was levied. It is a manifestation of the Units having migrated and capacities created. There is not an iota of doubt that Revenue loss to Government if India is imminent," Singh said.

Further on making a point on the manufacturers who by increasing the MRP price are increasing their and trader's profit Singh made a comparative difference between the MRP of a pack (10 tablets) of Amlodipine (for hypertension) manufactured in Aurangabad is priced at Rs 8.57, while the medicine manufactured in Solan (Himachal) is priced at Rs 36.

Simultaneously Ciprofloxacin tabs (250 mg) manufactured in New Delhi is Rs 14:50, whereas the medicine manufactured in Parwanoo is Rs 31:39.

'The consumer is at the receiving end , but the pharma units in exempt states are exploiting the situation to control the Rs 16,000 crore medicine market ," he said.