‘’Encourage R&D activity on clinical research front’’

With a vision to establish India as a global centre for high quality, ethical contract research, ACRO India is continuously investing resources to set higher levels of a benchmark for systems, ethical standards, to be followed by CRO’s in India. To encourage the R&D activity on the clinical research front, we propose the following changes in Budget 2013-2014:

Service tax

There is some clarity required with regards to the service tax applicability and by simplifying the law we can boost research. The benefits derived by doing so will compensate for the loss of revenue in the long run in the following manner:

1. Reduce the R&D cost and therefore make the Indian pharmaceutical companies more competitive in the global market and reduce the cost of drugs in India
2. It will make R&D service offered by CROs more competitive and therefore grow this important industry. This will create more job opportunities and get us closer to develop new drugs locally at a very competitive cost.
3. The forex earnings will increase for both pharmaceutical companies and CROs.

The language of Notification No.12/2012-under Service Tax Act should be amended as:

Considering the R&D activity is very capital intensive due to the investments required in investments in new technology and training of man power the capital that’s saved on account of exemption in IT can be used for productive purpose and that will result in overall growth and competitiveness of the local CROs. This shall boost the research activities in India and can make India a global research hub by becoming more competitive among the other Asian countries. Both the above amendments shall also increase the employment in the country by way of development of existing and new units and will also increase export business which shall increase foreign exchange earnings.

– Apurva Shah, Chairman, Association of Contract Research Organizations, (ACRO)