Pharma issues left unaddressed in the Union Budget: Expert

Sai Nikesh | The Dollar Business In view of the Union Budget and India witnessing significant tax reforms in bringing in a single comprehensive tax on goods and services, The Pharma Export Promotion Council on Monday, organised a post-budget interactive session in association with the Ernst & Young (E&Y) as the knowledge partner in Hyderabad. The meeting discussed critical issues that would help the Pharmaceutical Industry plan for the changes that are likely to evolve in the aftermath of Budget 2015-16 as also bring together the industry's point of view on the implications stemming from the budget. Speaking to The Dollar Business P V Appaji, Director General, Pharmexcil, said, “There is a need for investments aimed at quality improvement and this should be considered as a research activity in order to ensure improved tax benefits for the pharma sector.” Stating that the Union Budget did not address the above issue of tax benefits, Appaji said that the pharma industry’s plea for resolving the CENVAT (Central Value Added Tax) scheme accumulation issue faced by the pharma exporters was also not looked into and hoped these issues be addressed by the government at least in the post-budget session. Beldi Sridhar, Chartered Accountant, BELDI & Associates, welcomed the Goods & Service Tax (GST) when The Dollar Business sought his views on the GST regime. Sridhar went on to say that a single and comprehensive GST regime will definitely come as a help to the pharma sector and is expected to boost exports from the sector in a structured manner and will have a positive impact on the sector in the long run. The E&Y presentation highlighted various issues on the common amendments made under the Service Tax, Central Excise Tax, GTA, reversal of credits, penalty provision, GST route based procedures, among others. On the common amendments under service tax, it was pointed that the uniform abatement of 70% has been provided for transportation of goods by rail, road or vessels and the implementation to this effect is expected to come into effect from April, 2015. The industry expects major changes in the tax structure through the implementation of the GST that is going to be effective from 2016.  

This article was published on March 03, 2015.