Following the footsteps of drug units in the excise free zones, small scale drug units in the non excise free zones have also sought a relief package from the government. The SME Pharma Industries Confederation (SPIC) has recently submitted a plea to the Prime Minister, Manmohan Singh for providing assistance to the drug manufacturers in the non excise free zones.
The small scale pharmaceutical industry in the non excise free zones has sought Prime Minister’s support to remove anomalies created by maximum retail price (MRP)-based excise duty system for medicines. Small drug manufacturers have alleged that bigger companies in excise-free zones were taking advantage of this system by printing higher MRP on decontrolled medicines.
The new system was introduced to discourage high trade margins at the retail level. However, lack of any tax rule on MRP was misused by big pharmaceutical companies in the excise free zones to increase prices on labels.
SPIC further argued that drug makers in the excise free zones enjoy 20% excise advantage on items with high trade margins as well as income tax exemption while small scale drug makers do not get such facilities. Therefore, it has pleaded with the government to offer them adequate relief package.
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