The Hindu Business Line : Duty cut on six life-saving, bulk drugs

In a bid to encourage drug manufacturing and make available medicines at cheaper rates, the Finance Minister, Mr P. Chidambaram, announced a slew of initiatives for the pharmaceutical and healthcare sectors.

Customs duty on six specified drugs and bulk drugs used in treating cancer, diabetes, asthma and hepatitis B has been halved from 10 per cent to 5 per cent in order. Customs duty on specified raw materials for manufacture of ELISA kits has been reduced from 10 per cent and 7.5 per cent to 5 per cent.

Enzyme-Linked Immuno Sorbent Assay, or ELISA, is a biochemical technique used mainly in immunology to detect the presence of an antibody or an antigen in a sample. The ELISA has been used as a diagnostic tool in medicine and plant pathology, as well as a quality control check in various industries.

Other cuts

Excise duty on formulations has also been reduced from 16 per cent to 8 per cent on all drugs. Similar cut in excise duty has been announced on several surgical products, including instant sterile dressing pads, burn therapy pads, corn removers, sterile surgical catgut, sterile absorbable surgical and sterile tissue adhesive for wounds closure, first aid boxes and kits and blood grouping reagents.

The Finance Minister has removed the excise duty on anti-AIDS drug Atazanavir and bulk drugs in order to enable local manufacturing.

Outlay

Pharma companies will also benefit by the move to allow 125 per cent Income Tax rebate for payments made to R&D institutions under section 35(1) (ii).

For the healthcare sector, the Finance Ministry has announced extension of the five-year tax holiday to hospitals under section 80-IB. Hospitals set up in specified areas between April 1, 2008 and March 31, 2013 will benefit from this move.

The total outlay for the health sector for the year 2008-09 has been pegged at Rs 16,534 crore, including Rs 12,050 crore for National Rural Health Mission and Rs 993 crore for National Aids Control Programme.

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