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ABLE submits 28-point recommendation for Budget 2015-16; demands 200% weighted tax deduction
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Nandita Vijay, Bengaluru
February 18 , 2015
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Inclusion of global spends on R&D and patenting, 200% weighted tax
deduction, MAT exemption for life sciences SEZs, provision of 15 to 25%
tax on imported products in all government tenders are among the key
recommendations of the Association of Biotechnology Led Entrepreneurs
(ABLE)) made in its 28 point budget proposals.
Further, ABLE
insists on change in listing norms for biotechnology companies to enable
access to capital markets. The objective is to drive innovation and
revenue-less IP driven companies are given eligibility by SEBI.
In
order to realise the Make in India vision, ABLE suggests that all
indigenously made biotech products be given 15 to 25% weighted advantage
over imported products in all government tenders, said ABLE president
Dr P M Murali.
Under the Innovate in India project, ABLE wants
the government exemption on custom duty for contract research
organisations (CROs) involved in genomic services under Sec-2,b and omit
service tax on any activity related to clinical trials under Sec-4,a.
There should also be duty exemption on diagnostic kits for infectious
diseases under Sec-2,h, and Sec-2,I. The government should ensure that
no VAT, CST levy on paediatric vaccines as per Sec-3,a.
The
amendment pertaining to 200% weighted tax deduction alone will drive
innovation in an exponential way. The sector is denied 2 years of tax
holiday on account of regulatory gestation which negatively impacts
return on investment, he added.
The government in its agenda has declared the creation of an innovation fund of Rs.10,000 crore. Now ABLE recommends that the R&D cess be utilised to create this fund, said Dr Murali.
Mandating
a deduction under Section 35(2AB), ABLE has stated that Indian life
science industry is in a nascent stage and any R & D takes time to
yield fruits. Considering the long gestation period to break-even and
R&D incentives globally offered by other countries, weighted
deduction should be increased from 200% to 300%, he noted.
The
Association sees the need for the government to create a grant for
hiring trainees in skill development programmes and also 50% matching
grant for overseas training under Sec-1,C {b, c}.
Along with the
Department of Biotechnology (DBT), ABLE has developed a road map for the
Indian biotechnology sector which could clock a turnover from the
current $5-7 billion to $100 billion before 2025. The current growth has
stagnated at 15% year-on-year but the ambition is to grow it to about
30%. States of Karnataka, Telangana, Andhra Pradesh and Gujarat have
invested in biotech and indicate growth prospects, he said.
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