SSIs protest against MRP-based excise duty

SSIs protest against MRP-based excise duty

PTI – Chennai

Small pharmaceutical companies protested against the Centre’s maximum retail price (MRP) based central excise duty on medicines saying the new duty structure has caused ‘total disruption’ on their margins.

The new MRP-based excise duty, which was introduced from January 7 would also make a large number of SSI units in the pharma industry ineligible for the SSI exemption limits. Earlier, the excise duty was based on ex-factory price.

According to B Sethuraman, president, Pharmaceutical Manufacturing Association of Tamil Nadu, ‘‘Most SSI units manufacturing and selling their own products have a turnover of Rs 50 lakh only under the earlier ex-factory price based excise duty structure. However, they will now cross the excise exemption limit of Rs one crore, thereby there will not be any SSI enjoying the SSI exemption limit.’’

According to him 25 per cent of the pharma SSI was thriving mainly on contract manufacturing for larger companies, who will now withdraw the contract and get the products manufactured in excise free states such as Uttaranchal, Himachal Pradesh and Jammu and Kashmir.

‘‘The pharma industry is already burdened with WTO and VAT. Therefore, they cannot take any additional burden in the form of an increase in excise duty,’’ Sethuraman said.

The all-India strike was called by the Confederation of Indian Pharmaceutical Industry (CIPI). About 300 people, representing the promoters of pharma SSI units and their employees, took part in the demonstration, held near the Central railway station, Chennai. Sethuraman said, ‘‘The sudden arbitrary decision of the finance ministry to levy excise duty has caused total disruption to the industry.’’ He said the future course of action would be decided at the All India Convention of Confederation of Indian Pharmaceutical Industry in Delhi during June-end.