|
Basic customs duty on 9 specified life savings drugs and their bulk drugs and one vaccine is being reduced to 5%. Further, these drugs will be exempt from excise and countervailing duty.
|
The scope of the current provision of weighted deduction of 150% on expenditure incurred on in-house R&D has been extended.
|
Focus on healthcare to be increased. Provision for the National Rural Health Mission increased by Rs 20.5 bn over and above Rs 120.7 bn provided in the Interim Budget.
|
Fringe benefit tax (FBT) abolished.
|
Rate of minimum alternate tax (MAT) on book profits has been increased from 10% to 15%, but with a provision of carrying forward the tax credit on MAT to ten years from the current seven years.
|
| | | |
|
Reduction in customs duty on certain bulk drugs used in making life saving drugs to 5% is a positive for companies having product pipeline catering to these segments.
|
Extended weighted deduction on in-house R&D is beneficial to domestic pharma companies who are increasingly undertaking R&D activities to become research driven companies in the long term.
|
Abolition of the fringe benefit tax will mean that conducting business can be less complicated and less burdensome.
|
| |
|
Reduction in customs duty on bulk drugs used in making certain life saving drugs to 5% means that companies such as Dr.Reddy’s, Biocon, Cipla, Piramal Healthcare, Aventis will be able to pass on this benefit to consumers, in which case there will not be much impact on the margins of the companies.
|
The extension in weighted deduction on in-house R&D will benefit domestic pharma companies such as Glenmark, Dr.Reddy’s, Ranbaxy, Biocon, Piramal Healthcare, Sun Pharma and Cadila Healthcare.
|
|
|
|
|
|
The Indian pharma sector has undergone some tough times in the past one year having to contend with a steeply falling rupee and 