In its pre-budget recommendations for Union-Budget (2018-19), MTaI 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 said.
MTaI further requested that Safe Harbour guidelines be provided for pharmaceutical companies which 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 sector like IT/ITES, KPO and auto component manufacturers prescribing desirable margins to avoid litigations under transfer pricing regulations.
MTaI also raised concerns over high custom duties on medical devices. There was a significant increase ranging from 50 to 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.
The association has also urged the government to reduce Minimum Alternative Tax (MAT) rate to 15 per cent.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
Get Breaking news, live coverage, and Latest News from India and around the world on NDTV.com. Catch all the Live TV action on NDTV 24x7 and NDTV India. Like us on Facebook or follow us on Twitter and Instagram for latest news and live news updates.