Moneycontrol
Mar 10, 2016 03:10 PM IST | Source: PTI

Industry opposes import duty hike on medical devices

"Customs duty on all medical devices has been increased by around 7.3 percent. It should have been lowered because majority of the medical devices (75 percent) are imported.


Medical devices industry has strongly opposed the government's proposal to increase the import duty, saying it will increase healthcare costs for patients and hurt the Rs 50,000-crore industry.


"Customs duty on all medical devices has been increased by around 7.3 percent. It should have been lowered because majority of the medical devices (75 percent) are imported.


"So poor patients now have to pay extra, as cost will go up for us. The effective customs duty now comes between 18 to 28 percent which was 10-18 percent earlier," CII's Medical Equipment Division Chairman Pavan Choudary said.


Effective rate of duty in neighbouring countries is between 0 and 5 percent while in India's case it comes to 18 to 28 percent, he added.


"This means small bulk items will start getting smuggled and then the patient will not get legal guarantees. We were hoping that the customs duty will be rolled back in Budget but it was not," Choudary said.


Government had increased import duty on certain specified equipment to 7.5 percent from 5 percent in January.


Simultaneously, the exemption from additional customs duty (SAD) on these medical devices had also been withdrawn, and these now attract 4 percent SAD.


CII Medical Technology Division Chairman Himanshu Baid said the industry has written to Prime Minister's Office (PMO) requesting the government to roll back the hike.


"Presently there is no policy in the country for the medical devices sector. We are in a regulatory dilemma on whether we are regulated by Ministry of Health or Ministry of Pharma. The policies which were announced by the government 2-3 years ago have not been implemented," he said.


He said a policy for medical devices sector was announced in April last year but there has been no follow through on it.


Besides, CII also slammed the government's proposal to hike the registration fee.

"At present registration cost for one product family is USD 1,000. Any importer who has to set up shop in the country has to pay registration cost for that particular product family. The proposal is to increase it to USD 8,000," Baid said.

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