FICCI proposes seven-point package to promote biotech

New Delhi, Dec 24 (UNI) To promote innovation in biotechnology, and effect a five-fold increase in revenue generation in the sector to five billion dollars along with creation of one million jobs by 2010, industry chamber FICCI today suggested a seven-point package to the government.

Under the package, FICCI recommended that tax benefit should be extended to expenditure incurred on clinical trials for all companies since expenditure incurred on scientific research is allowed.

The chamber also proposed that government may consider providing relief to recognised biotech, pharmaceutical and clinical research companies by giving a blanket permission, of up to Rs 1 crore per annum, for import of laboratory consumables.

These can be certified as non-hazardous, if required.

At present, there is a lack of technical expertise at the airports and ports to handle the biological materials.

Customs officials may be updated regularly with the new policies on issues related to handling of biological materials, the chamber opined.

The registry of chemicals, biochemical of the customs database at the ports, airports may be updated.

FICCI noted that there is exemption against the additional customs duty applicable to Public Funded Research Organisations or Non Profit Research Organisations, where they have to pay only five per cent Custom Duty on Equipment for Research, which should be granted to private sector too.

On the lines of excise duty exemption, the chamber has pointed out that customs duty should also be nil for equipments. Moreover, when basic customs duty is nil there should not be any additional customs duty and education cess.

Service tax was imposed on clinical trials for testing of drugs and formulations this year.

Accordingly, fees charged for clinical trial services in India would now attract service tax at the rate of 12.24 per cent under the category 'technical testing and analysis services' in the hands of the Indian Clinical Research Organisation (CRO).

Further, service tax would also to be liable on pass through costs of the Indian CRO.

FICCI also stressed the need to give a fiscal boost to the production and import of biofuel and ethanol to encourage large scale use of the environmental-friendly fuel.

As for biofuel and ethanol production, it suggested that the government may consider extending tax incentives like excise and import duty exemption to promote use of bio-diesel and ethanol in auto fuels in order to slash down India's import dependence to meet its fuel needs.

Excise duty exemption would result in lower prices for the same for end user. While doing so, the government may also consider customs and excise duty exemption to plant and machinery used for processing oil seeds for bio-fuel production as also to the biofuels.

Investments in Jatropha plantations made by the corporates should be given tax holiday for a period of 10 years from the beginning of the Jatropha oil production from the plantation and no import duty should be imposed on machinery and equipments used for esterification of Jatropha oil.

Also, investments made on ethanol production from plantations of maize and soybean should also be given a tax holiday for a period of 10 years and there should also be no import duty on machinery and equipments used for ethanol production from maize and soybean, the chamber suggested.

UNI KR PV HT1337