Union Budget 2024: Pharma industry seeks rollback of health cess on critical medical devices

Finance Minister Nirmala Sitharaman is all set to announce the Union Budget 2024 on, Tuesday July 23. It will be first Budget for the Prime Minister Narendra Modi-led NDA government after it secured a third consecutive term in the 2024 Lok Sabha elections.

Ahead of the Union Budget 2024, the healthcare & pharma industries are hoping for announcements that could boost innovation and investment in Medical devices manufacturing. Expectations range from specific investments to ensure competitiveness for new chemical entities to exemptions on customs duty for the import of pharmaceutical goods.  

“The life sciences sector in India, has shown remarkable resilience and growth over the past years. As the 2024 financial budget announcement approaches, the sector anticipates further support and reforms to sustain its growth trajectory and enhance its global competitiveness,” Hitesh Sharma, Partner and Life Sciences Leader – Tax, EY India, said. 

Outlining the sector's wish list for the upcoming Union Budget, Sharma urged the government to introduce concessional tax regime and Profit Linked Incentives for medical device manufacturing. 

“The rollback of the health cess on critical medical devices is also sought to alleviate the financial burden on consumers. Lowering customs duty on imported diagnostic equipment and adjusting high GST rates on lab supplies will foster R&D investments,” he said. 

The government should ensure the shortage of healthcare workers and introduce PLI for investment in healthcare infrastructure to ensure state of the art infrastructure, he added. 

Besides, he also sought specific investments to ensure competitiveness for new chemical entities and/ or new biological entities (NBEs) and  provide a 200% weighted deduction for companies undertaking such R&D. 

“The life sciences sector remains optimistic that the upcoming budget will address these expectations, further strengthening India's position as a research and innovation hub and supporting the Atmanirbhar Bharat vision, thereby enabling to touch USD130 billion in value by the end of 2030 and USD 450 billion market by 2047,” Sharma said.

Union Budget 2024 | Making a record for any Finance Minister, Nirmala Sitharaman will be presenting her 7th Union Budget on July 23, 2024 under the Modi 3.0 government. While inflation has burnt a hole in the pockets of 'aam janata', will this Budget spell relief for Indians? Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.