On Wednesday, 1 February 2023, the Hon'ble Finance Minister, Nirmala Sitharaman, presented Union Budget 2023 in the Lok Sabha.
We bring you the key amendments proposed in Finance Bill 2023 in respect of life science and health care sector.
While expectations were high from this year’s Budget for the Pharma and Healthcare Industry, there is little which was actually covered by the Finance Minister in the Budget. The government health expenditure has been increased from 1.4% of GDP in FY 19 to 2.1% of GDP in FY 23.
Initiatives announced in the budget which could help the Healthcare industry include a plan to have Centres of excellence for Artificial Intelligence and introduction of multi-disciplinary courses for medical devices to upskill manpower for futuristic medical technologies and high-end manufacturing and research.
To boost R&D and innovation, the Government has announced a new pharma program and further collaborations for public and private medical faculties and private R&D teams. While these are steps in the right direction, the much-hoped income tax benefits in the form of higher R&D linked weighted deductions, extension of sunset date for commencement of manufacturing to avail concessional tax regime by new manufacturing units or simplification of the patent box regime were not considered. Also missed was extension of customs exemption for specified goods used in pharmaceutical and biotechnology sector for R&D beyond 31 March 2023.
