Production moving out of Goa

by Abdul rauf beig
Posted on 2009-06-26
PANAJI: The decision of the major pharmaceutical companies to shift manufacturing of some of their products to their units in other parts of the country where they enjoy tax holidays and other benefits, has hit the revenue collection of the state excise badly, which has recorded sharp fall in its collection from the pharma industry, as compared to the previous year.
The revenue of the excise department alone has come down by nearly Rs 4 crore during the financial year 2008-09. The department received revenue of Rs 2.85 crore as against Rs 6.25 crore from a major pharmaceutical unit. The loss of revenue from this company alone was over Rs 3.40 crore.
The scenario appears bleak in the new financial year and the department would have to focus on collection of revenue from other sources, unless the government could convince the central government to provide sops to the industries in the state, said sources in the department.
The sources also said that indications for this year also were much below expectations as the major pharmaceutical firm has paid just Rs 10 lakh during the first quarter of the financial year 2009-10 as against over Rs 35 lakh during the corresponding period last year. The same firm had paid Rs 55 lakh during the financial year 2007-08.
According to information provided by sources in the excise department most pharmaceutical companies import alcohol for use in manufacture of various medicinal products, including aerosol, ointments and syrup, but with concessions having been stopped many of them have shifted/transferred their production to their other facilities in the hilly states of Himachal Pradesh, Uttaranchal etc.
Besides, the revenue loss to the excise department the revenue collection of commercial tax department has also come down by over Rs 31 lakh in the last financial year, as compared to the revenue collection of the previous year.
As against total collection of Rs 4.20 crore in the financial year 2007-08, the collection of the department from pharmaceutical manufacturers has fallen to Rs 3.89 crore in 2008-09.
This is despite the turnover in the pharmaceutical companies rising by over Rs 100 crore during the last financial year as compared to 2007-08.
A senior official of a pharmaceutical company said that the sops from government to the industry play an important role in continuing their production in states where their facilities were located and since the sops have ended in Goa, the companies has chosen to shift their production elsewhere. He also said that manufacture of some of the products have been stopped in the state.
Despite the loss of revenue from pharmaceutical companies, the excise department did well not only to meet the target of revenue collection but exceeded it. The commissioner of excise, Mr Sandip Jacques, informed that the department collected Rs 88.7 crore in the financial year 2008-09, which was almost Rs 13 crore more as compared to revenue collection of Rs 75.94 crore in the year 2007-08.
The excise commissioner further stated that his department could meet the target as it managed to plug the loopholes in the liquor sector and despite the restrictions on liquor industry in view of parliamentary elections it did well to achieve the target set for revenue collection. He also said that there is an increase in revenue collection of the department in 2008-09 over Rs 31 crore as compared to revenue collected in the year 2006-07.