Allocate Rs 500 crores each year from the R&D cess accessible by the Technology Development Board to stimulate the biotech sector across the range: from human resource development, high-end institutional development in biotech, stimulating incubators, ignition grants, start-ups and small businesses, and collaborative efforts in cutting-edge technologies with business of all sizes on one hand and national and international academia on the other.
Corporate Social Responsibility (CSR) funds may be used for stimulating public-good and socially-relevant research in collaboration through partnership with the biotech industry Research Assistance Council (BIRAC) of the Department of Biotechnology (DBT). All such contributions to BIRAC should be fully-tax exempt. As of now only incubators in academic institutions are eligible for availing CSR funds for promoting innovation. This was passed as a GO last year. This should be extended to all incubators and science/ biotech/ knowledge parks, whether they are part of academic institutions or not.
The Department of Biotechnology be allotted an additional Rs 50 crores a year to further stimulate and develop the International Centre for Genetic Engineering and Biotechnology (ICGEB) into an India-led hub for high-end application oriented research in the life sciences and biotech in international partnership stretching from Africa and West Asia to Japan and the Pacific.
Service tax for the CRO industry is putting Indian companies at a significant disadvantage over some of our neighbours and competitors. We request elimination or substantial reduction in the service tax, especially for overseas clients paying in foreign currency.
Weighted tax deductions should be applicable to outsourced clinical trials and R&D, preparations of dossiers, foreign consulting/ legal fees for New Chemicals Entities (NCE) and Abbreviated New Drug Applications (ANDA) filings with the US FDA and Patent defending charges.
Encourage setting up of venture capital funds focused on investments in biotechnology. All contributions by Indian corporate, including pharma companies, to SEBI registered biotechnology funds should be eligible for the weighted average tax deduction under Section 35 (2AB).
- Incentivise investment bankers to list biotech companies on SME exchanges
- Allow a tax holiday of 10 years for indigenously developed biopharma drugs
- Mandate that only India manufactured drug products would be eligible for weighted premium and tenders.
- Extend 100 per cent tax free status for biotechnology special economic zones (SEZs).
- Current tax incentives of 200 per cent weighted deduction should be increased to 300 per cent with a validity of 10 years.
- Create technology parks similar to IT/ITES parks, with tax and duty benefits to support industry efforts in attaining self-reliance in this critical component of our scientific and economic growth.
- Education systems must be developed to support the requirements of the industry for research and development.
- Companies must be encouraged to start their manufacturing operations in India. However, the current duty and tax structure acts as a deterrent for local manufacturing as Customs Duty on complete system is lower than the components for manufacturing and in addition the buyers have to spend additional Central Excise Duty and sales tax on locally manufactured goods making it prohibitively expensive compared to imports
- When computing the MAT, weight deduction should be allowed under Sec-35 (2AB).
- Tax rebates to encourage green manufacturing services
- Provide grants for hiring trainees in skill development programmes and also 50 per cent matching grant for overseas training.
- 100 per cent Exemption of
Excise/ Customs Duty on:
1. All lifesaving medicines-anti-cancer, anti-AIDS etc.
2. Contract research organisations (CRO) involved in genomic services.
3. Consumables and capital goods of biotechnology industry.
4. Import duty for industrial biotechnology sector.
5. Raw materials used for manufacturing lifesaving drugs.
6. Diagnostic kits for infectious diseases
7. Molecular diagnostics for critical infections
- Exemption of all taxes (VAT, CST) on paediatric vaccines.
- Biotechnology companies should be treated as industrial, not as commercial consumers.
- Not for profit, section 25 incubators and biotech/knowledge /science parks be provided tax exemption.
- Price fixing for ethanol and incentives for biofuel industry.
- Setting up a Biotech Exports Promotional Council
– Dr PM Murali, President, Association of Biotechnology Led Enterprises (ABLE)