MTaI pitches for tax breaks to medical device R&D centres to boost investment in innovation based in-house capabilities centres
|
Our Bureau, New Delhi
January 11 , 2018
|
|
The Medical Technology Association of India (MTaI) has asked the
government to provide tax breaks to medical device R&D centres under
the transfer pricing act to boost investment in innovation based
in-house capabilities centres.
In its pre-budget recommendations
for Union Budget 2018-19, the association said: "The government needs
to provide tax holiday to medical device R&D centres under the
transfer pricing act to boost investment in high innovation-based
in-house capabilities centres."
"We also demand tax incentives
for the industry for developing global patents from India and tax
deduction on income made by individuals or a company for rewards earned
on patent development or licensing of patents," it added.
MTaI
further requested that Safe Harbour guidelines be provided for
pharmaceutical companies who are manufacturing and exporting the product
as contract manufacturer/loan licensee.
There are many
companies dealing in manufacturing and export of generic pharmaceutical
drugs under contract manufacturing arrangement. There are major
litigations on account of margins that the contract manufacturer should
have earned by transfer pricing cell of income tax department. The
Central Board of Direct Taxes (CBDT) has notified the Safe Harbour rule
covering sectors like IT/ITES, KPO and auto component manufacturers
prescribing desirable margins to avoid litigations under transfer
pricing regulations.
Considering that weighted deductions and
tax holidays are being phased out, MTaI recommended that the corporate
tax rates should also be reduced for large companies in line with the
government's objective to widen the tax base and make these companies
globally competitive. MTaI also raised concerns over high custom duties
on medical devices. There was a significant increase ranging 50-60 per
cent on medical devices. This has adversely impacted costs for these
products in India where the government agenda is to provide low cost
healthcare available to masses.
This is especially important in
view of the fact that a significant 67-70 per cent of healthcare spends
is through private spending and there exists a wide gap in local
manufacturing of high quality medical devices.
“We strongly
recommend to restore the import duty rates on medical devices to earlier
rate of 5 per cent import duty where the overall import duty costs were
within range of 5-10 per cent and commensurate with import duty rates
in other competing economies like Singapore, Malaysia, Hong Kong and
Indonesia,” the association said.
The association has also urged
the government to reduce Minimum Alternative Tax (MAT) rate to 15 per
cent and amend Section 115JAA to provide that in case of an
amalgamation, where the amalgamating company has carry forward MAT
credit, the provisions of said section 115JAA would apply and the
amalgamated company would be eligible to set off and carry forward the
MAT credit of amalgamating company.
|
|
|
|
|
TOPICS
|
That foods might provide therapeutic benefits is clearly not a new concept. ...
|
|
|
|