Revenue dept no to sops for drug sector

In its comments on the proposed pharma policy, the revenue department has turned down a number of proposals, including end-use-based exemptions, reduction in excise duties on drugs and increase in the SSI exemption limit for the pharma sector.

It has also said no to providing exemption to testing and analysis services for drugs and data processing.

In a response to the draft Cabinet note on the National Pharma policy, the revenue department's tax research unit reiterated its contention that every proposal which had revenue implications needed to be vetted carefully as there was no stated policy of the government on duty adjustments to influence prices. The department has accordingly sought modifications to the draft policy.

On the issue of providing fiscal incentives on a long-term basis to research and development companies (a committee under RA Mashelkar is looking at the matter separately), the department has pointed out that a number of customs duty concessions are already available for R&D projects.

Since, duty structures are part of the governments' fiscal policy, the department feels that sector specific proposals should not form part of policies for the development of a particular sector.

"Duty structures should not be used as a general instrument of any policy. The proposals for fiscal incentives should be considered at the material time," sources said.