VISAKHAPATNAM: The rejection of demand for abolition of Minimum Alternate Tax (MAT) has irked industry bigwigs, mainly those from the pharma sector.
They pinned a lot of hopes after making several representations to the Ministry of Finance and the Ministry of Commerce to remove MAT.
In fact, many of the promoters in the Special Economic Zones thought that imposition of MAT was nothing but giving benefits on the one hand for 100% EoUs and snatching them away on the other.
“The rejection has disappointed us, though the decision to allow carry forward of the MAT credit for adjustment to subsequent years has come as partial relief,” Eisai Pharmaceuticals India managing director Sanjit Singh Lamba told The Hindu .
The Visakhapatnam region, comprising the three North Andhra districts, is home to several big pharma units, including Hospira, Reddy’s Lab, Divi’s, Aurobindo Pharma, Hetero, and Mylan. The industry has an estimated turnover of ₹25,000 crore to ₹30,000 crore. Jawaharlal Nehru Pharma City in Parawada is the largest cluster of pharma units with a turnover of ₹7,000 crore to ₹8,000 crore.
“North Andhra is the main pharma hub of Andhra Pradesh and as it earns a lot of foreign exchange and provides direct and indirect jobs to thousands of locals, we expected that a lot of incentives will be doled out to the industry, including removal of MAT,” said JNPC CEO Lal Krishna.
“The carrying forward of MAT credit from 10-15 years will only provide us relief to a limited extent. It would have been a great news had it been scrapped. The decision of US President Donald Trump to allow only make-in-America drugs will be a big setback to us, as we export almost 70 per cent of our products to the US,” CEO of another company said.
