The Hindu reports that Indian pharma companies are seeking a 2oo% tax rebate on R&D. Read in conjunction with my recent post on Indian pharma companies entering into collaboration with foreign firms for research we see our pharma companies are intent to promote research in a big way.
In its representation to Finance Ministry, industry chamber Indian Pharmaceutical Alliance (IPA) asserted that incentives in research and development (R&D) are required to boost the credentials of the sector from being a mere supplier of generic medicines to a research driven industry.
I don’t know if a 200% rebate will really make a very big difference though considering that there is already a 150% rebate available. Also rather illogically these rebates are only available to pharma companies and not to stand alone R&D firms.
The current provisions for deduction are restrictive in nature and cover only expenditure incidental to R&D carried on at the in-house facility. It is therefore suggested that its scope be widened, so as to also encompass within its fold all expenditure incidental to basic research carried on at any outside R&D facility, whether in India or overseas.” Ranbaxy said in its representation.