Keep clinical trial services out of service tax ambit
August, 26th 2014
The Association of Biotechnology Led Enterprises (ABLE) has requested the government to consider keeping clinical trial services out of the ambit of service tax.
As per the Union budget, these services, which were previously exempt, would now attract service tax of 12.36 per cent. The move, industry players say, would increase the cost of drug development in the country and lead to a corresponding increase in the price of the tested drugs.
"Drug development in India is already facing challenges on several fronts following which the number of global and local clinical trials has come down substantially.
The decreased number of trials will impact availability of drugs in the medium-to-long term and will increase dependence of Indian patients on imported drugs. We have urged for keeping these services out of the service tax for another five years," ABLE said in a statement here.
On July 28, the CDSCO (the Drug Organisation in India) had invited suggestions on its notification for improving its clinical trials management through application of IT. Though a laudable step, ABLE and Association of Contract Research Organisations ( ACRO) India have cautioned the DCGI (Drug Controller of India) to preserve confidentiality of the patients.
The industry body has also requested to retain the existing CTRI website for clear visibility of clinical trials in the country.
ABLE President Dr P M Murali said, "India's pharma and biotech industry has the potential to generate combined revenues of more than $ 100 billion by 2025 from approximately $ 25 billion as of today. To realise this quantum of growth, the right policy framework needs to be put in place. The sector must be provided with incentives through a number of tax-friendly measures to make it globally competitive."