IPA joins chorus, wants FBT exemptions

The Indian Pharmaceutical Alliance (IPA) has demanded that certain types of business expenditure — such as those relating to free sampl...

The Indian Pharmaceutical Alliance (IPA) has demanded that certain types of business expenditure — such as those relating to free samples for physicians, and gifts used for sales promotion — be exempt from the fringe benefit tax (FBT).

In its pre-budget memorandum, the IPA, a club of leading domestic companies, also said that foreign exchange income earned as licence fees, royalty and/or milestone payments from intellectual property should be treated on par with export income and be exempted from income tax for a period of 10 years.

The industry body said that the expenditure categories qualifying for the 150 per cent Research and Development exemption should include those incurred on clinical trials, on obtaining product registration from foreign authorities like the US FDA (Food and Drug Administration), on filing of patents abroad. It has also sought this benefit be extended to expenditure incurred on land and buildings to be used for R&D.

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The IPA has also sought duty exemption on clinical trial samples imported after getting the DCGI’s (Drug controller General of India) authorization. Moreover, they have asked for clinical research organizations (CROs) providing clinical trial, drug development and data management services are exempt from service tax.

Pre-Budget meets

NEW DELHI:FINANCE minister P Chidambaram will begin the pre-budget meetings with various stakeholders on next Monday and conclude these interactions on Friday. On Monday, he will hold day-long meetings with industry captains. Those who are slated to meet the minister include Mukesh Ambani, Ratan Tata, Anil Ambani, YC Deweshwar, Saroj Pddar, Sunil Mittal and Swati Piramal.

On Tuesday, Chidambaram will meet leading agriculturalists. On Thursday, he will have a series of meetings with trade unions namely INTUC, CITU, BMS and AITUC. The FM will hear the economists — Soumitra Choudhury, Ila Patnaik and Amitabh Bose — on Friday. The revenue secretary had concluded the budget meetings with various industry bodies by mid-December. Measures to widen the tax base by widening of the service tax base and augmenting direct tax compliance are likely in Budget 2006.