Budget 2012: Exempt duty for Antigens/Antibodies used in Diagnostic kits, says FICCI.

NEW DELHI: FICCI in its pre-budget recommendations on medical equipments and devices industry asked the government to exempt duty for Antigens/Antibodies used in Diagnostic Kits. The import of raw materials such as antigens/antibodies or any other ingredient corresponding to the manufacture of diagnostic test kits specified in list 4 put the local manufacturers at a disadvantage in comparison to imported finished diagnostic test kits specified in list 4 which are imported at nil duty. The notification should therefore include: Bulk drugs/antigens/antibodies (monoclonal/ polyclonal)/raw materials/components used in the manufacture of Life saving drugs/medicines including their salts and esters and diagnostic test kits".

 The import of certain diagnostic kits were covered under exemption No. 122, Sr. No. 363 is part of the list 37. The following items which were part of the now abolished List 37 need to be included in List 4 to allow for a level playing field for both the Indian manufacturers and importers.

>> AIDS (Acquired Immune Deficiency Syndrome) test kits
>> T.P.H.A kits and AIDS diagnostic kits.
>> Rapid diagnostic kit for detecting infection with malarial parasite / Tuberculosis ( TB)
>> Australia antigen/ HBsAg kit.
>> HCV (Hepatitis C Virus) by any technology.
>> Dengue detection systems/kits.

Exemptions for components for Elisa Kits to be expanded: The list that provides the benefit of lower duty may be extended to include antigen or antibody on the solid phase for coating. The other key component is the enzyme conjugate and its stabilizing buffer / solutions. It is important to put the local ELISA kit manufacturer at par with the importer because all finished ELISA kits are imported at nil duty as per item no. 36 of List 4.

Cases of duty rationalization: With abolishing of List 37, all diagnostic devices are now covered under Chapter 90 (9027) customs unless they are part of General Exemption No.107, S.No.83, List 4. They therefore attract high duty rates and it is recommended that they be classified under 9018 or NIL duty to encourage access to newer technologies. Further duty on manufacture or import of diagnostic reagents should be reduced to encourage manufacturing in India.

Apart from that, duty structure of following items should be rationalized:

>> Excise duty for manufacturing of Diagnostics Reagents may be made NIL from existing 10% to allow cost benefit to indigenous manufacturer.
>> Diagnostics Reagents may be treated same as Medical Equipment/Devices under Chapter 9018 from existing 26.75%
>> Duty on PCR kits may be made NIL duty as given for ELISA, CLIA Diagnostics kits, etc from existing 26.75% in order to quantify the load of deadly viruses/bacteria such as Hepatitis C, CMV, H1N1, TB, etc in patients for subsequent treatment and monitoring
>> All diagnostics equipments including Fully Automated Biochemical Analyzers may be assessed at NIL duty or with a total duty of 9.63% as sudden reversal and imposing duty of 14.72% makes the Cost of these Hi Tech Instruments significantly expensive
>> Customs Tariff for Diagnostics kits may be based on criticality of the test rather than the technology.

Duty exemption should be based on test rather than the analyte for critical tests.

In some areas like the Laboratory Diagnostics, almost 65% of the total Laboratory Diagnostics products are consumables in the form of liquids/plastics and most of these are imported at high freight and customs duty of almost 28%. These can be easily produced indigenously but these become viable only if there is a minimum of 20% customs duty differentials for Laboratory Diagnostics Instruments and 30 to 35% differentials for these reagents/ consumables between finished goods imports and raw materials and parts imports.

Source : articles.economictimes.indiatimes.com