Budget 2013: Allow weighted deduction for pharmaceutical expenditure outside the approved R&D facility, says FICCI

NEW DELHI: Stating that the pharmaceutical research and development is very expensive and time consuming as compared to other industrial research, Federation of Indian Chambers of Commerce and Industry ( FICCI) wants a weighted deduction under section 35(2AB) for expenditure outside the approved R&D facility in the upcoming budget 2013.

"The current provisions for deduction u/s 35(2AB) are restrictive in nature, so as to cover only expenditure incidental to research carried on at the in-house R&D facility", said FICCI.

FICCI also added that some of the activities though directly related to research and development are not eligible for weighted deduction e.g. clinical trials undertaken on patients in hospitals, since the same are carried outside the approved R&D facility.

"All expenditure related to research carried on in the in-house facility i.e. clinical trials, bioequivalence studies, regulatory and patent approvals should be eligible for weighted deduction, even if these activities are carried outside the approved R&D facility including overseas expenditure," the industry body said.

A weighted deduction at 200% is allowed on in-house research & development expenditure incurred by companies engaged in the business of biotechnology or manufacture or production of specified goods said FICCI.