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Ananth Kumar for simpler tax structure in pharma and chemicals industry
Inverted tax structure in pharma, chemicals and petrochemicals industry needs to be rectified in the upcoming Budget, Chemicals and Fertiliser Minister Ananth Kumar said.
New Delhi: Inverted tax structure in pharma, chemicals and petrochemicals industry needs to be rectified in the upcoming Budget, Chemicals and Fertiliser Minister Ananth Kumar said.
Pharma, as well as the chemicals industry, have been demanding lowering of import duties on raw materials to make the domestic industry more competitive.
When asked about his Ministry's Budget wish list, Kumar said: "The proposal is that inverted taxes for both pharma and chemicals and petrochemicals industries should be rectified."
Under inverted tax structure, duties on finished goods are lower than the import duty on raw materials.
Last September, medical devices industry had demanded the government to rationalise tax structure to ensure that the import duty on raw materials is kept lower, or hike the customs duty on finished products.
Kumar had earlier said that the government has raised the import duty on finished products gradually to 11-12 percent.
Besides simplification of inverted tax structure, the Minister has pitched for special banking arrangement for the fertiliser sector, which is reeling under the huge subsidy arrears to the tune of Rs 35,000 crore.
"I have already written to Finance Minister to allow special banking arrangement for Rs 20,000 crore to clear old dues. I had a meeting with FM on this issue. I am hopeful this will be approved," he said.
The Minister pointed out that the fertiliser industry is facing some liquidity issue as it has sold soil-nutrients to farmers on 100 percent credit post-demonetisation.
Kumar said the country's growth and employment generation would get a boost if fertiliser subsidy arrear gets cleared and more funds are allocated for institutes like CIPET.
"If backlog of fertiliser industry is cleared and money is allocated for Central Institute of Plastics Engineering and Technology (CIPET), National Institute of Pharmaceutical Education and Research (NIPER), medical devices, then the GDP growth rate and employment generation will be more," he added.
For the 2016-17 fiscal, the government has allocated Rs 70,000 crore for fertiliser subsidy, Rs 211 crore for Department of pharmaceuticals and Rs 202 crore to the Department of Chemicals and Petrochemicals.