For the upcoming fiscal year, the new administration has given the pharmaceutical industry exemptions from customs duties worth Rs. 25 billion on the import of Covid-19-related products as well as other medical devices, life-saving medications, raw materials, etc (FY23).
The cost of the customs duty exemptions being provided to the pharmaceutical industry for the upcoming fiscal year has been determined by the Federal Board of Revenue (FBR). On the import of various commodities relating to Covid-19 through five distinct SROs for the next fiscal year, it has reportedly given a customs tax exemption worth Rs. 7.48 billion.
According to the Customs Act of 1969, the FBR requested a customs tax exemption of Rs. 10.18 billion for the pharmaceutical industry on the import of drugs—mostly life-saving ones. For the upcoming fiscal year, the country’s pharmaceutical industry has also received exemptions from customs duties worth Rs. 3.59 billion on the import of diagnostic kits and equipment and Rs. 1.16 billion on the import of packaging materials and raw materials.
According to the Customs Act of 1969, the Board has granted the pharmaceutical industry a Rs. 1.89 billion exemption from paying customs duties on imports of active medicinal ingredients. For the next fiscal year, the FBR has suggested an exemption from customs tax of Rs. 753 million on the import of disposables used in cardiology/cardiac surgery, neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, and gynecology. Additionally, it has waived import taxes of Rs. 406 million for testing kits for hepatitis and HIV.
The import of artificial kidneys, hemodialysis machines, hemodialyzers, A.V. fistula needles, hemodialysis fluids, powder, blood tubing tines for dialysis, reverse osmosis plants for dialysis, double lumen catheter for dialysis, and catheters for renal failure are also exempt from customs duties, according to the authorities. For the next fiscal year, a cost of Rs. 604 million has been estimated for the exemption on various medical devices and equipment.
To read our blog on “The government intends to eliminate the pharmaceutical industry’s sales tax diversion,” click here.