NPPA issues guidelines for price reduction after excise cut

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NPPA issues guidelines for price reduction after excise cut

AIT News Network

NEW DELHI. NPPA(National Pharmaceutical Pricing Authority) has issued guidelines apropos reduction in prices of non scheduled formulation packs consequent to lowering of excise duty from 16% to 8% to ensure that the benefit of the excise duty reduction announced in the Union Budget by the FM is passed on to the Consumers. The guidelines and Notification are as under:

F. No.20(109)/2006-Div.III/NPPA

National Pharmaceutical Pricing Authority
Ministry of Chemicals & Fertilizers
Government of India
New Delhi

5th/3rd Floor, YMCA Cultural Center Building,
1, Jai Singh Road, New Delhi-110 001
Dated : 10th March, 2008

Guideline No. 2/2008

Sub. : Reduction in prices of non-scheduled formulations packs consequent to reduction in excise duty from 16% to 8% and the rate of abatement from 42.5% to 35.5% notified by Ministry of Finance (Department of Revenue) on 01.03.2008.

Consequent upon the reduction in the rate of Excise duty on medicines from 16% to 8% notified by the Ministry of Finance, Department of Revenue vide notification no. 4/2008-Central Excise dated 01.03.08 and the rate of abatement from 42.5% to 35.5% vide notification no. 14/2008-Central Excise (N.T.) dated 01.03.2008, all manufacturers and marketing companies of formulations packs are advised to ensure that the benefit of this excise duty reduction and the reduced rate of abatement is passed on to Consumers through reduced Maximum Retail Price (MRP). Prices of all non-scheduled packs must accordingly be reduced downwards by 4.58% except in those categories of non-scheduled formulation packs where no excise duty has been actually paid to the Government and therefore no excise duty shall be chargeable in the MRP of such non-scheduled packs. The National Pharmaceutical Pricing Authority (NPPA) expects that the above reduction in MRP would be complied with by way of reduced MRP and that necessary revised price lists would be submitted to NPPA forthwith.

2. NPPA shall accordingly monitor the limit of 10% increase in prices per annum of non-scheduled packs based on the reduced MRP for all such packs where the batch of the formulation pack has been cleared by the manufacturer through the competent excise authorities on or after 1st March, 2008 in terms of abovementioned notification of the Ministry of Finance (Department of Revenue) both dated 01.03.2008

(L. M. Kaushal)
Director (Monitoring)

(Published in Part II, Section 3, Sub Section (ii) of the
Gazette of India Extraordinary)

Government of India
Ministry of Chemicals and Fertilizers
National Pharmaceuticals Pricing Authority

New Delhi, Dated : 3rd March, 2008

ORDER

S.O. 418(E) :- :- The Government of India in the Ministry of Finance (Department. of Revenue), Vide Notification No. 4/2008 -CE dated 1st March 2008 has reduced the excise duty on drugs and pharmaceuticals from 16% to 8%. The rate of abatement on Drugs and Pharmaceuticals has also been reduced from 42.5% to 35.5% vide Notification No. 14/2008-CE (NT) dated 1st March 2008 of the Government of India in the Ministry of Finance (Department of Revenue).

2. Now therefore, in exercise of the powers conferred by Paragraphs 8, 9 and 11 of the Drugs Price Control Order,1995, read with S.O. No.637(E) dated the 4th September 1997 issued by the Government of India in the Ministry of Chemicals and Fertilizers, the National Pharmaceutical Pricing Authority hereby , by way of this general notification, revises the Equivalent Maximum Retail price (MRP) (inclusive of all taxes) of all Scheduled formulation packs downward, consequent to these changes. All manufacturers are required to reduce the Equivalent Maximum Retail Price (MRP) (inclusive of Excise duty & all taxes) by 4.58%.

[For example: For an existing equivalent MRP of Rs. 100, the revised Equivalent MRP (inclusive of all taxes) shall be Rs.95.42]

3. The above reduction in the Equivalent MRP (inclusive of Excise duty and all taxes) shall take effect immediately in terms of above mentioned two notifications both dated the 1st March 2008 of the Ministry of Finance (Department of Revenue).

4. The reduction in prices of such scheduled packs shall however not apply on those categories of scheduled formulation packs where no excise duty has been actually paid to the Government and therefore no excise duty shall be chargeable in the MRP of these scheduled formulation packs.

PN/98/2008/NPPA

File No. F-8(5)/2008/DP/NPPA-Div.II

(RAJIV WADHAWAN)

Deputy Director

National Pharmaceuticals Pricing Authority