KTR urges Union Minister for Chemicals and Fertilizers to focus on pharma companies facing financial crisis amid COVID-19

ANI
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Hyderabad (Telangana) [India], May 7 (ANI): In a letter to Union Minister for Chemicals and Fertilizers D.V. Sadananda Gowda, Telangana Minister KT Rama Rao has urged for special focus on the pharmaceutical industry which is experiencing financial burden due to reduced production capacity, shortage of labour, price pressure caused by supply chain issues and maintaining a large skilled workforce on payrolls among the many other deeper issues as a result of COVID-19. "Cost of operations of the industry has increased tremendously owing to the increased cost of raw materials/inputs, increased logistics costs, reduced capacities, interim measures to comply with the lockdown guidelines, etc. In order to ease the financial burden to an extent, I urge the Government of India to expedite both income tax and GST refunds to these companies. GoI should also consider extending a moratorium on tax payments for the next 6 months, at least for the MSME sector, to further ease the financial stress on companies," the letter read. The Minister also wrote that the pharma companies pay 18 per cent GST on Application Programming Interface (APIs) though the GST on formulations is only 12 per cent. He urged the Centre to reduce the GST on APIs to 12 per cent to equalize the gap and prevent input tax credit that will allow companies to have better working capital in these unprecedented times. While requesting the Centre "to consider substantial export incentives to the Indian pharma companies," he also urged the government to "consider lowering the capital borrowing costs for Pharmaceutical industry to offset the after-effects of COVID-19 on the sector." The letter further read: "I request the Government to form a Pharmaceutical based task force to ensure ease of doing business including regulatory approvals, approvals from State Governments, port level clearances, clearances for deploying manpower etc." "Government may consider maintaining an inventory for both API and Formulations for a minimum period of 3 months in regulatory approved warehouses in the country at its cost to offer some relief to manufacturers. Alternatively, as another interim measure Government of India may reimburse the cost of inventory management to Pharma industry," it read. KTR also wrote: "Ministry of Micro, Small and Medium Enterprises (MSMEs) play a vital role in the Pharmaceutical Industry with significant representation in the pharma exports. It is time that the Government of India announces a Pharma MSME specific package. I recommend reviewing the definition of MSMEs and increasing the investment criteria of Rs 10 crore presently used in their classification." (ANI)