New products after March 31 to attract excise duty
Pharmaceutical companies in Himachal Pradesh are queuing up to register new products at the drugs controller’s office before the seven-year tax holiday window for hill states ends on March 31. Over 450 drug companies have their production units in the state.
The clarification by the Central Board of Excise and Customs, Ministry of Finance, last month, stated any new product coming out of the existing machinery after the cut-off date will attract excise duty. This decision triggered the rush for approval of new products.
Himachal drug firms that — mostly contract manufacturers — are now trying to register as many products as possible before the month ends. This would enable them to manufacture these registered products under new brands even after March 31.
In addition to existing units, some new manufacturing facilities are also desperate to get the drug regulator’s approval to start production before the deadline. "There are over 30 companies that are trying to get their new manufacturing facilities registered before the month end. Other applications are from existing manufacturers who are trying to augment their product portfolio," a senior state drug regulatory official said.
According to him, each new company can apply for 10 product approvals without any additional fee. For each extra product, the companies would have to pay Rs 300. With over 480 pharmaceutical units up and running in Himachal alone, the number of last-minute product approvals could amount to a few thousand, industry sources say. The country’s biggest drug manufacturing hub is in Baddi, Himachal Pradesh.
Pharmaceutical majors, including Ranbaxy, Dr Reddys and GSK, have manufacturing presence in the state.