The pharmaceuticals business in Uttarakhand is gradually losing its sheen, thanks to the recent four percentage point cut in excise duty by the Centre.
With excise on pharma now at 4 per cent in the country, the pharma cluster of nearly 50 to 60 small companies in Dehra Dun has lost the advantage of 100 per cent excise rebate in the wake of the seven-year tax holiday in the hill state, which had earlier given them a big advantage over others. This advantage had enabled pharma companies in the state to procure bulk orders from other parts of the country.
But soon after the 4 per cent cut in excise duty, pharma companies elsewhere in the country began getting 8 per cent modvat, due to which pharma companies in Uttarakhand lost the advantage. Due to zero excise, pharma companies in Uttarakhand do not get modvat, said experts in the field.
“The zero per cent excise duty in Uttarakhand is no more an attraction, due to which we are losing our business to others,” said Pramod Kalani, president of the Drug Manufacturing Association of Uttarakhand.
