These observations were made by the revenue secretary S Narayan at a recent meeting of the ad-hoc panel set up by the strategic management group in the Prime Minister's Office.

Dr Narayan made these observations in reply to suggestions by representatives of the pharmaceutical industry for extension of customs duty exemption on import of capital goods, materials and consumables for R&D to industry at par with laboratories of the Centre for Scientific and Industrial Research (CSIR). The ad-hoc committee has been recently set up under the chairmanship of finance secretary Ajit Kumar with secretaries of four ministries and representatives of industry as its members. Its recommendations will have a key role in deciding budgetary provisions for the pharma industry.

Dr Narayan was against providing customs duty exemption on those inputs for pharmaceutical research and development, which are also used for other activities including production of drugs and intermediates. Among other proposals, pharma industry has asked the government to consider countervailing duty equal to excise duty on duty-free import to ensure a level-playing field for the domestic industry.