Medical devices sector seeks Customs duty, VAT waiver
July, 04th 2014
The medical devices industry, estimated at over $4.4 billion, wants medical equipment, surgical implants and other devices to be exempt from Customs duty.
Ahead of the Budget, to be presented on July 10, AdvaMed, an association of medical device manufacturers, has said that tariff barriers on imports of finished goods, raw materials and parts will be detrimental for the industry.
Besides seeking Customs duty exemption for products such as heart valves, pacemakers, sterilisers and topical skin adhesives, the association has recommended certain excise duty cuts.
“It is recommended that the excise duty on medical equipment be reduced significantly and may be prescribed at the lowest slab to enable the domestic industry to find a foothold,” AdvaMed has said.
The industry body also seeks exemption from, or a minimal rate of, service tax for medical equipment, besides value-added tax holidays.
In lieu of VAT, AdvaMed suggests that a special countervailing duty of 4 per cent could be applied.
Medical tech parks
AdvaMed has also proposed that medical technology parks, with basic infrastructure for manufacturers, should be created.
Subsidies should be given for research and development in medical technology space, it has suggested.
“To ensure that there is thrust in the R&D area for design and innovation of these products, special incentives must be offered to attract more participants,” said Abby Pratt, Vice-President of AdvaMed.
“As the benefits to society from such projects would be significant, the medical devices sector is seeking incentives in the form of income tax write-offs for up to 250 per cent of the value of investment for R&D and innovation of medical instruments, diagnostics instruments, consumables and devices,” she added.