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MTal seeks tax breaks for R&D

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NEW DELHI: MTal has also sought a reduction in Corporate tax rates.

The Medical Technology Association of India (MTaI) has sought tax-sops in the upcoming budget for companies engaging in research and development of medical device manufacturing.

Making its recommendations containing its demands from the Union Budget to be presented by Finance Minister Arun Jaitley the MTaI has sought a tax holiday for medical device R&D centres under the transfer pricing act. Its reasoning is that this will boost investment in high innovation based in-house capabilities centres.

It said, "The association also demands tax incentives for the industry for developing global patents from India and tax deduction on income made by individuals or a company for rewards earned on patent development or licensing of patents," it said.

The association again requested that Safe Harbour guidelines be provided for pharmaceutical companies who are manufacturing and exporting the product as contract manufacturer/ loan licensee.

The agency recommended that the corporate tax rates should also be reduced for large companies in line with the governments objective to widen the tax base and make these companies globally competitive.

The technology association raised concerns over high customs duties on medical devices. There was a significant increase of 50-60 percent on medical devices. This has adversely impacted cost of these products in India where the government agenda is to provide low-cost health care to the masses.

This is especially important in view of the fact that a significant 67-70 percent of healthcare spend is through private spending and there exists a wide gap in local manufacturing of high-quality medical devices.

Many companies under MTaI deal in manufacturing and export of generic pharmaceutical drugs under contract manufacturing arrangement.

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