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ASU industry cannot be exempted from ABS tax, minister tells ADMA

Swati Rana, Mumbai
Saturday, June 13, 2015, 08:00 Hrs  [IST]

Union minister for environment and forest (MoEF) Prakash Javadekar has informed the Ayurvedic Drug Manufacturers Association (ADMA) that the Ayurveda, Siddha and Unani (ASU) industry has to pay Access Benefit Sharing (ABS) tax for sustainability and no exemption can be provided by the government.

The minister's statement in this regard came at a meeting held recently to discuss the negative interpretations of several provisions of the Biodiversity Act (BD Act). In the meeting, the ADMA representatives sought the minister's intervention in the matter to ensure fair interpretation of the Act and help the ASU sector to survive.

Nimish Shroff, general secretary of ADMA, says “We had met Prakash Javadekar and had asked for clarification related to BD Act. The minister said no exemption can be provided related to ABS and the industry has to pay ABS but for other issues related to BD Act a task force will be formed soon”.

The Indian ASU sector is largely made up of small scale or cottage scale industries with an annual turnover of less than Rs.1 crore. Their annual consumption of herbs is also very small. When purely Indian companies submit Form I to their respective State Biodiversity Boards, the regulatory bodies will still have enough controls to ensure that the usage of bioresources remains sustainable.

As per section 23 and 24 of the BD Act, there is no specific mention about collection of ABS from purely Indian companies. Further, under section 32 there are only 3 sources of revenue specified for State Biodiversity Fund and none of them refer to the collection of Access and/or Benefit Sharing fees. Under section 21, subsection (2), there is a clear mention about NBA charging benefit sharing, however, this section is applicable only to non-Indian companies as described in section 3(2) of the Act.

ADMA requested that benefit sharing fees should not be imposed on ASU industry as it was originally not intended in the Act and access fee is applicable to purely Indian companies u/s 41(3), which is payable to BMCs from where bioresources are purchased. Further, the ADMA recommended that herbal substances which are naturally produced, as such, by nature should be treated as bioresources and all the processed forms (which are made by man in industrial units) should be treated as value added products.

To encourage cultivation, ADMA has demanded that all the cultivated bio-resources should be completely exempted from ABS. These may have been self cultivated by a manufacturer or obtained through contract farming directly with the farmers or indirectly through NGOs/community based organizations (CBO).


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