Financial Daily from THE HINDU group of publications
Monday, Jan 23, 2006
Industry & Economy
Biotech sector wants IPR-savvy accreditation body Presents 16-point charter to Finance Minister
Bangalore , Jan. 22
THE biotechnology sector's pre-Budget wish-list this year has gone beyond the realm of mundane duty and tax reliefs. The concerns have international hues, seeking provision for an exclusive, IPR-focussed arbitration council or tribunal, apart from a well-equipped accreditation council that can match the USFDA.
These are prominent in the 16-point recommendations the Association for Biotechnology Led Enterprises (ABLE) has made to the Finance Minister for consideration in the 2006-07 Budget.
Arbitration council needed: With India emerging as a destination for biotech and pharma R&D, clinical trials and contract manufacturing, the sector will need a separate IPR-savvy arbitration council or a quasi-judicial tribunal, ABLE, which represents the $1-billion industry, said in a statement.
Effective January 1, 2005, Indian laws are TRIPS compliant, ushering in a product patent regime. ABLE said, "Given the stress under which the Indian judicial system operates and backlog of cases, industry feels that existing system would not be capable of handling the IPR related disputes efficiently.
"Additionally, the judges may not be fully versed with the technical details of IPR-related issues and there is need to have specially trained judicial personnel and courts to showcase India as the next hub for contract research, clinical trials and contract manufacturing in biotechnology space."
`Create accreditation agency': ABLE has also sought outlay for creating an accreditation agency of international standards on the lines of USFDA, TGA or BP.
"There is need to (internationally) offer quality in both manufacturing as well as services domain. This requires setting up of an internationally accepted accreditation agency which can set standards, protocols and act as gatekeeper for producing world-quality products/services. The agency can also (liaise) with bodies of international repute such as the USFDA, BP, TGA etc. for setting up guidelines for its functioning/operations," it has argued.
It has also sought budgetary provision for biotech parks set up with State support, as also status of priority sector for loans from banks and FIs. Rs 200 crore proposed under the Technology Development Board should be kept aside for providing long-term funds to biotech companies.
On the fiscal incentives side, one anomaly it seeks to correct is the existing duty exemption on imported life-saving drugs and diagnostics, which does not stretch to components used in indigenous manufacturing efforts.
Pricing & information: Biotech products made in India should be given a two-year moratorium from price control under the National Pharmaceutical Pricing Authority NPPA.
The companies should be exempted from filing market-sensitive information in ER-5 and ER-6 under Cenvat credit rules.
Technology transfer and technology licensing in biotechnology, in its view, should be exempt from withholding tax until 2010. The cost of filing international patents should be treated as R&D expense, which again should be discounted for tax. ABLE has sought raising the weighted average tax deduction from 150 per cent to 200 per cent and extension of it until March 2015.
Also in the wishlist is a Rs 200-crore fund to compensate States that provide subsidy, specifically to approved transgenic seeds.
Biotech parks claiming SEZ status should get five-year duty and tax reliefs and have a minimum area of 25 acres or 1 million sq. ft. of building area as in the case of the IT industry.
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