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Medical Equipment Cos Ask Govt To Bring Down Import Duty To
5% In Union Budget
Medical equipment manufacturers and providers have jointly sought a reduction
in import duty on medical equipments in the Union Budget 2008-09 for the benefit
of industry and patients.
The Indian healthcare industry is on the threshold of a major growth
trajectory driven by an upsurge in lifestyle diseases. This has resulted in a
higher incidence of indispensable surgical interventions in India carried out
with imported equipments. Present import duty on equipment varies from 12
percent to 120 percent in products ranging from kits to large equipment.
From the standpoint of a medical equipment manufacturer, GE Healthcare calls
to rationalize import duties across all medical equipments at a standard rate of
5 percent bringing it in line with other Asian countries and doing away with
multiple rates for different equipments.
According to the Pricewater-house Coopers in its report, 'Healthcare in India
: Emerging market report 2007', the Indian healthcare sector is valued at US $34
billion and is projected to grow to nearly $40 billion by 2012. In the backdrop
of a promising future, government should grant infrastructure industry status to
healthcare as it is a key driver for the growth and development of the country.
India has the potential to cement its place as one of the world's major
healthcare hubs, pointed out the V Raja, president and CEO, GE Healthcare South
Asia.
It is also important for the government to encourage indigenous manufacture
of medical equipment with a view to reduce the end cost of the product and
thereby benefit the patient in the form of lower cost of treatment, by allowing
import of raw materials, components and spares for manufacturing of medical
equipments at zero percent import duty. Import of parts for servicing medical
equipments is subjected to import duty at 21 percent and refund is made to the
extent of 12 percent if proof of usage of the same is provided. As spare parts
of medical equipments can only be used for servicing medical equipment, the need
for furnishing proof of usage or the scope for any misuse of the same just does
not arise and therefore there is no need to levy a higher duty initially and
then subject it to refund at a subsequent stage, simplifying the procedure for
both the assesses and administration saving costs for both the parties.
All medical equipments are subjected to service contract which attracts
service tax at the rate of 12.5 percent. The impact of this is again passed on
to the patients. Either, the service tax should to be completely removed on
medical equipments, service contracts or reduced to 4% lowering the burden on
the patients, stated the president and CEO, GE Healthcare South Asia.
Going by the potential for growth in terms of advanced infrastructure and
ability of Indian surgeons and physicians to perform high tech interventions,
the government should look at slashing import duty not just on device and
equipment but also the consumables like Mannequins and artificial blood vessels
products used to train the doctors and para medical staff in emergency medicine,
critical care and surgeries, said Dr. NK Venkataramana, vice chairman and
neurosurgeon BGS Global Hospitals and director, Global Neuro Sciences.
Most of the consumables and devices are not manufactured in India and these
are life saving equipment used by medical professionals to be adept in surgery
and emergency medicine. Present import duty for these is at 120 percent and just
not affordable even by corporate hospitals to increase their volumes in such
products, explained Dr. Venkataramana.
On the diagnostic kits front, detection of HIV Antibodies is exempt from
Customs and Excise duties under List 4 and CVD/CED under the Central Excise Act.
Companies are seeking exemption in customs and excise duty for imported and
local manufacturers of kits of Hepatitis C, malaria, tuberculosis as it falls
with the category of life saving drugs. Abolishing the duty will give price
advantage for export and the price relief for the Indian patients stated Dr.
Shama Bhat, Bhat Biotech.
(Ref: Hospital Equipment & Solutions | March 2008)
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