Union Budget 2010 Impact on medical sector
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Medical sector in India got tax exemptions in the manufacturing of its devices from Union Budget 2010-11 along with the introduction of excellent initiatives towards the development of the sector. These measures were proposed by the Finance Minister in his Union budget 2010 speech in the parliament on February 26, 2010 and are estimated to have a significant impact on medical sector in FY 2010-11.
Union Budget 2010 Impact on medical sector
The Finance Minister in his Union budget 2010 speech proposed a concessional tariff of 5%, CVD of 4% in addition to tax exemption from exclusive additional tariff on all medical apparatus. A 5% concessional tariff has also been proposed on components for the production of such apparatus along with an exemption from CVD and exclusive tariff.
The FM has proposed to extend the tax exemption on medical apparatus and devices and concessional tariff available to certified government hospitals. Moreover, the producers of orthopaedic implants have been relieved from import tax.
The manufacturers of orthopaedic implants were demanding for a greater rate if tariff on their inputs rather than their finished products. Currently the Orthopedic/ prosthetic products industry worth ` 5750 crores, as per a recent industry analysis carried out by National Institute of Pharmaceutical Education and Research by (NIPER), Ahmedabad. The incentives proposed by the FM are expected to trigger the expansion of already fast developing medical apparatus and machinery sector in India. By 2010 the medical apparatus and machinery industry is estimated to reach USD 1.8 billion and is projected to expand at a rate of 23% on annual basis as per the NIPER report.
The ministry has also declared some tax incentives for the medical sector for establishing "cold chain" road and rail network along with a hike in subjective deduction on R&D expenses up to 200% on internal R&D operating costs.
The budget has also declared to increase the subjective deduction on expenses accrued on central labs, R&D organizations, institutions, universities, to facilitate scientific investigation to 175% against the previous 125%.
Last updated on : 15-05-2011
The Finance Minister in his Union budget 2010 speech proposed a concessional tariff of 5%, CVD of 4% in addition to tax exemption from exclusive additional tariff on all medical apparatus. A 5% concessional tariff has also been proposed on components for the production of such apparatus along with an exemption from CVD and exclusive tariff.
The FM has proposed to extend the tax exemption on medical apparatus and devices and concessional tariff available to certified government hospitals. Moreover, the producers of orthopaedic implants have been relieved from import tax.
The manufacturers of orthopaedic implants were demanding for a greater rate if tariff on their inputs rather than their finished products. Currently the Orthopedic/ prosthetic products industry worth ` 5750 crores, as per a recent industry analysis carried out by National Institute of Pharmaceutical Education and Research by (NIPER), Ahmedabad. The incentives proposed by the FM are expected to trigger the expansion of already fast developing medical apparatus and machinery sector in India. By 2010 the medical apparatus and machinery industry is estimated to reach USD 1.8 billion and is projected to expand at a rate of 23% on annual basis as per the NIPER report.
The ministry has also declared some tax incentives for the medical sector for establishing "cold chain" road and rail network along with a hike in subjective deduction on R&D expenses up to 200% on internal R&D operating costs.
The budget has also declared to increase the subjective deduction on expenses accrued on central labs, R&D organizations, institutions, universities, to facilitate scientific investigation to 175% against the previous 125%.
Last updated on : 15-05-2011
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