Quote of Mr Pawan Chaudhary, Chairman and Managing Director, Venus Remedies on his expectations from the 2015-16 Union Budget:
New Delhi, Feb 25, 2015: The Union Finance Minister should take his government’s “Make in India” campaign to the next level by taking steps to boost indigenous research. He should give impetus to R&D in the pharmaceutical sector through incentive-linked funding to companies engaged in in-house research and special tax rebates on income from patents, as is the practice in many European countries.
This will help India come up with low-cost innovative solutions in critical care segments like antimicrobial resistance and oncology.The government should take measures to accelerate the pace of growth in the pharmaceutical sector through incentives to exporters, like exemption under Section 80HHC. There is also an urgent need to rectify the inverted structure of excise duty in the pharmaceutical industry.
Temporary tools of taxation like surcharge and education cess should be replaced by a more rational tax structure based on a wider tax base. The government also needs to slash Minimum Alternate Tax (MAT) rates, which are so high that they have started impacting the cash flows of companies. Since many pharmaceutical companies have subsidiaries overseas and are subject to international taxes, safe harbour rules should be extended to cover sales of pharmaceutical products.
