The Association of Biotechnology led Enterprises (ABLE) and the Department of Bio-technology (DBT) have developed a roadmap for growing the Indian biotechnology sector from the current $5-7 billion to $100 billion before the end of 2025. The growth of this sector has stagnated currently at 15 per cent year on year and the ambition is to grow it to about 30 per cent.
ABLE has been constantly stressing the need to infuse about $4-5 billion per annum for the next 4 years in a number of areas like skill development, innovation and infrastructure. If nurtured this sector is likely to return the investment in about 5 years due to the extraordinary growth potential.
The key states where the Biotech Industry is likely to grow are Karnataka, Telangana, Andhra Pradesh and Gujarat. With focused investments, each of these states is capable of taking a quarter of the $100 billion.
ABLE estimates that over 25,000 new successful ventures will contribute to the growth of about 100,000 new technologies across the country. A minimum of 100,000 new skilled jobs will be created in addition to the current growth in this sector.
Biotechnology and the Information technology sector share a number of overlapping areas and India can greatly benefit from the concomitant growth of both the sectors.
The following are key recommendations that will have an impact on innovation and manufacturing of our sector.
Inclusion of global spends on R&D and patenting, pertaining to 200 per cent weighted tax deduction on R&D. Currently only Indian spends are eligible. This amendment alone will drive innovation in an exponential way.
In all Biotech/Pharma SEZs we would like MAT to be exempted. We also seek extension of the 10 years of tax holiday of Biotech/Pharma SEZs by another 2 years to accomodate regulatory approval time lines which are specific to the sector.
At present, the sector is denied 2 years of tax holiday on account of regulatory gestation which negatively impacts ROI.
Among the many expectations from the budget, the deployment of GST is one of the most anticipated fiscal reforms. GST implementation from coming fiscal year is possible. GST implementation is not just a tax reform but a business transformation. The Pharmaceuticals sector will be significantly impacted by this change.
A change in listing norms for Biotechnology companies to enable access to capital markets. This will drive innovation and value creation of IP led companies. We would request that revenue-less IP driven companies are provided eligilbility by SEBI.
Creation of an Innovation fund of 10,000 Cr as declared by the Government. We recommend that the R&D cess be utilised to create this fund.
In order to realise the MAKE in INDIA vision we suggest that all indigeneously made biotech products should be given 15 to 25 per cent weighted advantage over imported products in all government tenders.
Key Tax Proposals
INNOVATE IN INDIA
Current tax incentives of 200 per cent weighted deduction should be increased to 300 per cent with a validity of 10 years. ( Sec-1,A,a)
Weighted tax deduction should be applicable to outsourced clinical trials and R & D, preparation of dossiers, foreign consulting/legal fees for NCE (New Chemical Entities) and ANDA (Abbreviated New Drug Applications) filings with global regulatory agencies and Patent defending charges ( Sec-1,A,{b and c})
Under section 35 (2AB) – 200% deduction to be available on lease rentals for research labs. ( Sec-1,A,{f})
100% exemption of custom duty for Contract research organizations (CROs) involved in genomic services. ( Sec-2,b)
100% exemption of service tax on any activity related to clinical trials. (Sec-4,a)
Allocation of Rs.500 crore corpus fund to take life science industry public by investment bankers. ( Sec-8,a,b,c)
Significant capital investment on access to technology licenses should qualify for the weighted deduction under section 35 (2AB) (Sec 9)
MAKE IN INDIA
To encourage setting up of venture capital funds focused on investments in biotechnology, all contributions by Indian Corporate to SEBI registered Biotechnology funds should be eligible for the weighted average tax deduction. (Sec-1,A{d})
If a tax payer is in loss, unused benefits should be allowed to be carried forward for an additional 4 years in the case of biotech companies in addition to the existing 8 year period eligible for all companies.
When computing the MAT, weighted deduction should be allowed under the act Sec 35 (2AB).(Sec-1,B)
Biotech companies located in SEZ should be exempted from MAT.
Tax rebates to encourage green manufacturing services. (Sec-1, C {a}).
Exemption of excise/custom duty on all life saving medicines-anti cancer, anti-AIDS etc. (Sec-2,a)
Exemption of excise/custom duty on consumables and capital goods of biotechnology industry. (Sec-2,c,d,e)
100% exemption of import duty for Industrial biotechnology sector. (Sec-2,f)
100% exemption of excise/customs duty on raw materials used for manufacturing life saving drugs. (Sec-2,g)
Exemption of duty on diagnostic kits for infectious diseases. (Sec-2,h)
Exemption of duty on molecular diagnostic for critical infections. (Sec-2,I)
100% exemption of all taxes (VAT, CST) on pediatric vaccines. (Sec-3,a)
Biotechnology companies should be treated as industrial consumers and not as commercial consumers. (Sec-5,a)
Extension of 100% tax free status for biotechnology special economic zones (SEZs). (Sec-6,a)
5 years tax holiday for indigenously developed bio-pharma drug Post Marketing Surveillance (PMS). (Sec-7,a)
Mandating that only indigenously manufactured drug products are eligible for weighted premium for tenders. (Sec-7,b)
Exemption of GST for all life saving drugs. (Sec-7,c)
Ten year soft loans with 5% simple interest. (Sec-7,d)
Price fixing for ethanol and incentives for bio-fuel industry. (Sec-8)
Indirect Tax levies-Customs Duty Rules as well Service Tax (point of Taxation), rules could be amended for the Agri-Biotech Sector. (Sec-9)
SKILL DEVELOPMENT IN INDIA
Grant for hiring trainees in skill development programs and also 50% matching grant for overseas training.
Key Tax ProposalsINNOVATE IN INDIA
SKILL DEVELOPMENT IN INDIA
Grant for hiring trainees in skill development programs and also 50% matching grant for overseas training. (Sec-1,C {b, c})
- See more at:
http://www.businessworld.in/news/economy/india/budget-2015-boost-for-bio-tech/1740543/page-1.html#sthash.wFAZTx45.dpuf
ABLE has been constantly stressing the need to infuse about $4-5 billion per annum for the next 4 years in a number of areas like skill development, innovation and infrastructure. If nurtured this sector is likely to return the investment in about 5 years due to the extraordinary growth potential.
The key states where the Biotech Industry is likely to grow are Karnataka, Telangana, Andhra Pradesh and Gujarat. With focused investments, each of these states is capable of taking a quarter of the $100 billion.
ABLE estimates that over 25,000 new successful ventures will contribute to the growth of about 100,000 new technologies across the country. A minimum of 100,000 new skilled jobs will be created in addition to the current growth in this sector.
Biotechnology and the Information technology sector share a number of overlapping areas and India can greatly benefit from the concomitant growth of both the sectors.
The following are key recommendations that will have an impact on innovation and manufacturing of our sector.
Inclusion of global spends on R&D and patenting, pertaining to 200 per cent weighted tax deduction on R&D. Currently only Indian spends are eligible. This amendment alone will drive innovation in an exponential way.
In all Biotech/Pharma SEZs we would like MAT to be exempted. We also seek extension of the 10 years of tax holiday of Biotech/Pharma SEZs by another 2 years to accomodate regulatory approval time lines which are specific to the sector.
At present, the sector is denied 2 years of tax holiday on account of regulatory gestation which negatively impacts ROI.
Among the many expectations from the budget, the deployment of GST is one of the most anticipated fiscal reforms. GST implementation from coming fiscal year is possible. GST implementation is not just a tax reform but a business transformation. The Pharmaceuticals sector will be significantly impacted by this change.
A change in listing norms for Biotechnology companies to enable access to capital markets. This will drive innovation and value creation of IP led companies. We would request that revenue-less IP driven companies are provided eligilbility by SEBI.
Creation of an Innovation fund of 10,000 Cr as declared by the Government. We recommend that the R&D cess be utilised to create this fund.
In order to realise the MAKE in INDIA vision we suggest that all indigeneously made biotech products should be given 15 to 25 per cent weighted advantage over imported products in all government tenders.
Key Tax Proposals
INNOVATE IN INDIA
Current tax incentives of 200 per cent weighted deduction should be increased to 300 per cent with a validity of 10 years. ( Sec-1,A,a)
Weighted tax deduction should be applicable to outsourced clinical trials and R & D, preparation of dossiers, foreign consulting/legal fees for NCE (New Chemical Entities) and ANDA (Abbreviated New Drug Applications) filings with global regulatory agencies and Patent defending charges ( Sec-1,A,{b and c})
Under section 35 (2AB) – 200% deduction to be available on lease rentals for research labs. ( Sec-1,A,{f})
100% exemption of custom duty for Contract research organizations (CROs) involved in genomic services. ( Sec-2,b)
100% exemption of service tax on any activity related to clinical trials. (Sec-4,a)
Allocation of Rs.500 crore corpus fund to take life science industry public by investment bankers. ( Sec-8,a,b,c)
Significant capital investment on access to technology licenses should qualify for the weighted deduction under section 35 (2AB) (Sec 9)
MAKE IN INDIA
To encourage setting up of venture capital funds focused on investments in biotechnology, all contributions by Indian Corporate to SEBI registered Biotechnology funds should be eligible for the weighted average tax deduction. (Sec-1,A{d})
If a tax payer is in loss, unused benefits should be allowed to be carried forward for an additional 4 years in the case of biotech companies in addition to the existing 8 year period eligible for all companies.
When computing the MAT, weighted deduction should be allowed under the act Sec 35 (2AB).(Sec-1,B)
Biotech companies located in SEZ should be exempted from MAT.
Tax rebates to encourage green manufacturing services. (Sec-1, C {a}).
Exemption of excise/custom duty on all life saving medicines-anti cancer, anti-AIDS etc. (Sec-2,a)
Exemption of excise/custom duty on consumables and capital goods of biotechnology industry. (Sec-2,c,d,e)
100% exemption of import duty for Industrial biotechnology sector. (Sec-2,f)
100% exemption of excise/customs duty on raw materials used for manufacturing life saving drugs. (Sec-2,g)
Exemption of duty on diagnostic kits for infectious diseases. (Sec-2,h)
Exemption of duty on molecular diagnostic for critical infections. (Sec-2,I)
100% exemption of all taxes (VAT, CST) on pediatric vaccines. (Sec-3,a)
Biotechnology companies should be treated as industrial consumers and not as commercial consumers. (Sec-5,a)
Extension of 100% tax free status for biotechnology special economic zones (SEZs). (Sec-6,a)
5 years tax holiday for indigenously developed bio-pharma drug Post Marketing Surveillance (PMS). (Sec-7,a)
Mandating that only indigenously manufactured drug products are eligible for weighted premium for tenders. (Sec-7,b)
Exemption of GST for all life saving drugs. (Sec-7,c)
Ten year soft loans with 5% simple interest. (Sec-7,d)
Price fixing for ethanol and incentives for bio-fuel industry. (Sec-8)
Indirect Tax levies-Customs Duty Rules as well Service Tax (point of Taxation), rules could be amended for the Agri-Biotech Sector. (Sec-9)
SKILL DEVELOPMENT IN INDIA
Grant for hiring trainees in skill development programs and also 50% matching grant for overseas training.
The
Association of Biotechnology led Enterprises (ABLE) and the Department
of Bio-technology (DBT) have developed a roadmap for growing the Indian
biotechnology sector from the current $5-7 billion to $100 billion
before the end of 2025. The growth of this sector has stagnated
currently at 15 per cent year on year and the ambition is to grow it to
about 30 per cent.
ABLE has been constantly stressing the need to infuse about $4-5 billion per annum for the next 4 years in a number of areas like skill development, innovation and infrastructure. If nurtured this sector is likely to return the investment in about 5 years due to the extraordinary growth potential.
The key states where the Biotech Industry is likely to grow are Karnataka, Telangana, Andhra Pradesh and Gujarat. With focused investments, each of these states is capable of taking a quarter of the $100 billion.
ABLE
estimates that over 25,000 new successful ventures will contribute to
the growth of about 100,000 new technologies across the country. A
minimum of 100,000 new skilled jobs will be created in addition to the
current growth in this sector.
Biotechnology and the Information technology sector share a number of overlapping areas and India can greatly benefit from the concomitant growth of both the sectors.
The following are key recommendations that will have an impact on innovation and manufacturing of our sector.
ABLE has been constantly stressing the need to infuse about $4-5 billion per annum for the next 4 years in a number of areas like skill development, innovation and infrastructure. If nurtured this sector is likely to return the investment in about 5 years due to the extraordinary growth potential.
The key states where the Biotech Industry is likely to grow are Karnataka, Telangana, Andhra Pradesh and Gujarat. With focused investments, each of these states is capable of taking a quarter of the $100 billion.
ABLE
estimates that over 25,000 new successful ventures will contribute to
the growth of about 100,000 new technologies across the country. A
minimum of 100,000 new skilled jobs will be created in addition to the
current growth in this sector. Biotechnology and the Information technology sector share a number of overlapping areas and India can greatly benefit from the concomitant growth of both the sectors.
The following are key recommendations that will have an impact on innovation and manufacturing of our sector.
- Inclusion of global spends on R&D and patenting, pertaining to 200 per cent weighted tax deduction on R&D. Currently only Indian spends are eligible. This amendment alone will drive innovation in an exponential way.
- In all Biotech/Pharma SEZs we would like MAT to be exempted. We also seek extension of the 10 years of tax holiday of Biotech/Pharma SEZs by another 2 years to accomodate regulatory approval time lines which are specific to the sector.
- At present, the sector is denied 2 years of tax holiday on account of regulatory gestation which negatively impacts ROI.
- Among the many expectations from the budget, the deployment of GST is one of the most anticipated fiscal reforms. GST implementation from coming fiscal year is possible. GST implementation is not just a tax reform but a business transformation. The Pharmaceuticals sector will be significantly impacted by this change.
- A change in listing norms for Biotechnology companies to enable access to capital markets. This will drive innovation and value creation of IP led companies. We would request that revenue-less IP driven companies are provided eligilbility by SEBI.
- Creation of an Innovation fund of 10,000 Cr as declared by the Government. We recommend that the R&D cess be utilised to create this fund.
- In order to realise the MAKE in INDIA vision we suggest that all indigeneously made biotech products should be given 15 to 25 per cent weighted advantage over imported products in all government tenders.
Key Tax ProposalsINNOVATE IN INDIA
- Current tax incentives of 200 per cent weighted deduction should be increased to 300 per cent with a validity of 10 years. ( Sec-1,A,a)
- Weighted tax deduction should be applicable to outsourced clinical trials and R & D, preparation of dossiers, foreign consulting/legal fees for NCE (New Chemical Entities) and ANDA (Abbreviated New Drug Applications) filings with global regulatory agencies and Patent defending charges ( Sec-1,A,{b and c})
- Under section 35 (2AB) – 200% deduction to be available on lease rentals for research labs. ( Sec-1,A,{f})
- 100% exemption of custom duty for Contract research organizations (CROs) involved in genomic services. ( Sec-2,b)
- 100% exemption of service tax on any activity related to clinical trials. (Sec-4,a)
- Allocation of Rs.500 crore corpus fund to take life science industry public by investment bankers. ( Sec-8,a,b,c)
- Significant capital investment on access to technology licenses should qualify for the weighted deduction under section 35 (2AB) (Sec 9)
- MAKE IN INDIA
- To encourage setting up of venture capital funds focused on investments in biotechnology, all contributions by Indian Corporate to SEBI registered Biotechnology funds should be eligible for the weighted average tax deduction. (Sec-1,A{d})
- If a tax payer is in loss, unused benefits should be allowed to be carried forward for an additional 4 years in the case of biotech companies in addition to the existing 8 year period eligible for all companies.
- When computing the MAT, weighted deduction should be allowed under the act Sec 35 (2AB).(Sec-1,B)
- Biotech companies located in SEZ should be exempted from MAT.
- Tax rebates to encourage green manufacturing services. (Sec-1, C {a}).
- Exemption of excise/custom duty on all life saving medicines-anti cancer, anti-AIDS etc. (Sec-2,a)
- Exemption of excise/custom duty on consumables and capital goods of biotechnology industry. (Sec-2,c,d,e)
- 100% exemption of import duty for Industrial biotechnology sector. (Sec-2,f)
- 100% exemption of excise/customs duty on raw materials used for manufacturing life saving drugs. (Sec-2,g)
- Exemption of duty on diagnostic kits for infectious diseases. (Sec-2,h)
- Exemption of duty on molecular diagnostic for critical infections. (Sec-2,I)
- 100% exemption of all taxes (VAT, CST) on pediatric vaccines. (Sec-3,a)
- Biotechnology companies should be treated as industrial consumers and not as commercial consumers. (Sec-5,a)
- Extension of 100% tax free status for biotechnology special economic zones (SEZs). (Sec-6,a)
- 5 years tax holiday for indigenously developed bio-pharma drug Post Marketing Surveillance (PMS). (Sec-7,a)
- Mandating that only indigenously manufactured drug products are eligible for weighted premium for tenders. (Sec-7,b)
- Exemption of GST for all life saving drugs. (Sec-7,c)
- Ten year soft loans with 5% simple interest. (Sec-7,d)
- Price fixing for ethanol and incentives for bio-fuel industry. (Sec-8)
- Indirect Tax levies-Customs Duty Rules as well Service Tax (point of Taxation), rules could be amended for the Agri-Biotech Sector. (Sec-9)
SKILL DEVELOPMENT IN INDIA
Grant for hiring trainees in skill development programs and also 50% matching grant for overseas training. (Sec-1,C {b, c})
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