The Indian pharmaceuticals industry is keenly watching the Budget for 2007-08 with the hope for more tax deductions for the R&D sector. The major demand for the industry remains the 10-year extension of tax benefits granted for pharmaceuticals R&D, that came to an end last year.
The industry is demanding that the expenditure on R&D works, such as clinical trials, which is incurred outside the facility, should also be considered for the weighted deduction that is allowed only for in-house R&D at present. Says DG Shah of Indian Pharmaceuticals Alliance (IPA), "Its scope should be widened, so as to also encompass within its fold all expenditure incidental to basic research carried on at any outside R&D facility, as also clinical trials, bio-equivalence studies, etc."
In the last budget, the pharmaceutical industry did not receive the perfect antidote it was expecting from the finance minister, but was happy that the sector was accorded some thrust as a growth segment. The industry welcomed the move to exempt clinical trials, a high growth segment, from the burden of service taxes, and saw the increased focus on healthcare and eradication of diseases like TB, malaria and polio as a positive step. But for some, the only positive measure for the industry in the last budget was the extension of the weighted average deduction on in-house R&D by five more years. This year, they would like to see the FM take these steps to the next level.
http://in.news.yahoo.com/financialexpress/20080215/r_t_fe_bs_budget08/tbs-pharma-industry-hopes-for-r-d-tax-so-7435665.html
