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The National Board of Revenue has granted VAT exemption to the imports of raw materials of active pharmaceutical ingredients (API) and reagents for six years till 2025 in a boost for the sector.
The revenue administration has published a notification to this effect recently.
The benefit comes as a number of drugmakers are producing APIs to make medicines to cater for both domestic and export markets.
The government in November last year opened the API Industrial Park in Gazaria, Munshiganj and 27 companies are preparing to establish plants there to make the raw materials for medicines.
“We welcome the initiative. It will be beneficial for the sector to some extent,” said SM Shafiuzzaman, secretary general of the Bangladesh Association of Pharmaceutical Industries (BAPI).
The members of BAPI represent nearly 200 drugmarkers and meet 98 percent of the annual demand of the local market amounting to more than $2 billion.
Bangladesh’s pharmaceuticals sector is expected to grow 15 percent year-on-year to reach $5.11 billion by 2023, propelled by investment by local companies as they seek to grab a bigger share of the global market, according to an estimate.
The sector crossed the $100-million export mark for the first time in 2017-18, according to data from the Export Promotion Bureau.
The NBR has attached conditions that API producers will have to make at least five molecules in every calendar year and have quality audit and current good manufacturing practice.
Also, API producers will have to spend at least 1 percent of their annual turnover on research and development to avail the benefit, according to the notice. The minimum value-addition should be 60 percent.
The privilege will be cancelled in case of non-compliance with VAT laws and the conditions related to the import of API without VAT.
source (TDS)
