The Indian medical devices industry is seeking substantial increase in custom duty on medical imports and a reduction in the GST in the Budget 2022-23. It is urging the Government to increase basic custom duty on import of medical devices to 15% from current 0 to 7.5% duty and reduction in GST from 18% to 12% as part of Budget expectations 2022-23.
This is in light of the high import dependence of India on medical devices. Due to low custom duty, India is importing Rs 46,000 crore of medical devices and is over 80% import dependent.
According to Rajiv Nath, Forum Coordinator, Association of Indian Medical Device Industry (AiMeD), “The importer lobby’s excuse of increase in the cost of medical devices for patients due to increase in custom duty is highly misplaced since the consumer buy devices on maximum retail price (MRP). We also urge the Government that instead of 18% Goods and Services Tax (GST) applicable on medical devices, the GST also needs to be reduced to a flat 12% for all medical devices.”
“Alternatively, the Government needs to put an additional 2% infrastructural development cess on imports that could be used to provide budgetary support to Department of Pharmaceuticals (DoP) that has the mandate to promote manufacturing of medical devices, build infrastructure of existing clusters and National Institute of Pharmaceutical Education and Research (NIPERs), help to make Medical Devices parks and finance further PLI schemes,” AiMeD in a release stated.
“The purpose of low duty is to help consumers get affordable access to medical devices. This objective is not realized if consumer will be charged a high MRP of 10 to 20 times import landed price. Customs registering of MRP on Bill of Entry will assist to bring in data generation for policy making by evidence of a trade margin rationalization policy for the manufacturer or importer,” Rajiv Nath added
According to Dr. Shravan Subramanyam, Managing Director, Wipro GE Healthcare at GE Healthcare, “We are expecting the 2022-23 Union Budget to also focus on investments in digital tools to support patient care and hospital workflow. To provide a fillip to the MedTech sector in 2022, waiving off the duty and cess, and releasing sectoral payment dues will free-up the working capital for investments in inventory of critical spare and lifesaving equipment.”
“Encouraging and supporting local manufacturing of healthcare equipment and devices will be critical in 2022 to achieve the target of increasing healthcare spending to 3% of the country’s GDP. Additionally, disruption in the global supply chain has now provided opportunities for large-scale manufacturing in India. We believe that continued focus on innovation and R&D, local manufacturing and digital technologies will enable India to become self-reliant,” Dr. Subramanyam added.