Indian Medical Device Industry Demands Higher Duty and Lower GST:
The Indian medical device industry wants a significant hike in customs tax on medical imports as well as a reduction in GST in the Budget 2022-23. It is encouraging the government to boost basic customs duty on medical device imports to 15%, up from the existing 0 to 7.5%, and to reduce GST from 18% to 12% as part of the 2022-23 budget.
This is in light of India’s huge import dependence on medical devices. Because of low customs duties, India imports Rs 46,000 crore of medical devices and is more than 80% import-dependent.
According to Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD), “The importer lobby’s argument of a rise in the cost of medical devices for patients due to an increase in customs tax is highly misguided because consumers buy equipment at their maximum retail price (MRP). We also encourage the government to cut the GST on medical devices from 18% to a flat 12%.
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“Alternatively, the Government needs to put an additional 2% infrastructural development cess on imports that could be used to provide budgetary support to the Department of Pharmaceuticals (DoP) which has the mandate to promote manufacturing of medical devices, build the infrastructure of existing clusters and National Institute of Pharmaceutical Education and Research (NIPERs), help to make Medical Devices parks and finance further PLI schemes,” according to an announcement from AiMeD.
“The goal of low duty is to provide consumers with affordable access to medical devices. This goal is not achieved if consumers are charged a high MRP of 10 to 20 times the import landing price. Customs registration of MRP on Bill of Entry will help to provide data for policymaking by providing evidence of a trade margin rationalization policy for the manufacturer or importer,” Rajiv Nath said.
According to Dr. Shravan Subramanyam, Managing Director of Wipro GE Healthcare at GE Healthcare, “We expect the 2022-23 Union Budget to include investments in digital tools to support patient care and hospital workflow.” To boost the MedTech sector in 2022, eliminating tariff and cess and releasing sectoral payment dues will free up operating capital for investments in inventories of key spare and lifesaving equipment.”
“Encouraging and supporting local production of healthcare equipment and gadgets will be important in 2022 to meet the goal of boosting healthcare spending to 3% of the country’s GDP. Additionally, disruptions in the global supply chain have created chances for large-scale manufacturing in India. We believe that continuing emphasis on innovation and R&D, local manufacturing, and digital technologies would enable India to achieve self-sufficiency,” Dr. Subramanyam said.
