MUMBAI: University research centres across India are seeing a series of cancelled work orders following the govt’s decision to hike customs duty on laboratory chemicals from 10% to 150%.
The move announced in the recent Budget has thrown research budgets at premier labs out of shape. All research labs, barring those for physics and maths, buy chemicals of international standard from certified suppliers. Funding agencies have already informed scientists that their budgets are fixed with no room to hike allocations to absorb the additional duty burden on imported materials.
“For my lab, which works in the field of biology, one which is a medium-sized one, the annual spend on chemicals is about Rs 45-50 lakh,” said a faculty member. “As per new norms, the tax burden on this spend would be Rs 1 crore, and my total bill would be Rs 1.5 crore now.”
The Budget’s fine print reads: “The BCD (basic customs duty) rate on lab chemicals classified under HS 9802 00 00 has been increased from 10% to 150%.” HS 9802 00 00 is the code under which some 40,000 different types of chemicals are listed.
“The chemicals under this code make up 90-95% of what we use. Even for most basic experiments, we need chemicals like salts of sodium, potassium, magnesium, and buffers. For growing cells, one needs media, and media needs chemicals. Think of chemicals as the most basic ingredient,” a senior scientist said, adding that the materials they procure need to meet uniform standards. The purchasing has to be from certified suppliers so that experiments conducted using the chemicals meet a prescribed international standard that enables the process to be “replicated” anywhere in the world.
For a multi-disciplinary institute like an IIT, chemicals make up a few crores of its annual average spend. Some faculty put the ballpark figure of chemicals purchased as 25% of the institute’s R&D budget. In a specialised lab at a centre dealing with cellular and microbiology, the spend on chemicals would be even higher. Scientists said given the steep hike, a purchase order earlier pegged at Rs 1.1 lakh inclusive of tax will now touch Rs 2.5 lakh; the break-up being Rs 1 lakh worth of chemicals and Rs 1.5 lakh for tax.
A letter sent by a top lab to an Indian scientist said, “Effectively July 24, 2024, customs duty on lab chemicals has been revised, impacting many products we will be shipping…we’re liaising with various govt authorities to understand the implications.”
Scientists said the only solution is to exempt academic institutes and labs from this hefty tax. “They are destroying the research culture in the country with their thoughtless actions. I call these the 5G problems: GST was already a pain and now, GeM, GTE, GFR,” summed up a senior well-known Indian researcher. GeM is the govt e-marketplace, GTE stands for global tender enquiry, and GFR is general finance rules.
The move announced in the recent Budget has thrown research budgets at premier labs out of shape. All research labs, barring those for physics and maths, buy chemicals of international standard from certified suppliers. Funding agencies have already informed scientists that their budgets are fixed with no room to hike allocations to absorb the additional duty burden on imported materials.
“For my lab, which works in the field of biology, one which is a medium-sized one, the annual spend on chemicals is about Rs 45-50 lakh,” said a faculty member. “As per new norms, the tax burden on this spend would be Rs 1 crore, and my total bill would be Rs 1.5 crore now.”
The Budget’s fine print reads: “The BCD (basic customs duty) rate on lab chemicals classified under HS 9802 00 00 has been increased from 10% to 150%.” HS 9802 00 00 is the code under which some 40,000 different types of chemicals are listed.
“The chemicals under this code make up 90-95% of what we use. Even for most basic experiments, we need chemicals like salts of sodium, potassium, magnesium, and buffers. For growing cells, one needs media, and media needs chemicals. Think of chemicals as the most basic ingredient,” a senior scientist said, adding that the materials they procure need to meet uniform standards. The purchasing has to be from certified suppliers so that experiments conducted using the chemicals meet a prescribed international standard that enables the process to be “replicated” anywhere in the world.
For a multi-disciplinary institute like an IIT, chemicals make up a few crores of its annual average spend. Some faculty put the ballpark figure of chemicals purchased as 25% of the institute’s R&D budget. In a specialised lab at a centre dealing with cellular and microbiology, the spend on chemicals would be even higher. Scientists said given the steep hike, a purchase order earlier pegged at Rs 1.1 lakh inclusive of tax will now touch Rs 2.5 lakh; the break-up being Rs 1 lakh worth of chemicals and Rs 1.5 lakh for tax.
A letter sent by a top lab to an Indian scientist said, “Effectively July 24, 2024, customs duty on lab chemicals has been revised, impacting many products we will be shipping…we’re liaising with various govt authorities to understand the implications.”
Scientists said the only solution is to exempt academic institutes and labs from this hefty tax. “They are destroying the research culture in the country with their thoughtless actions. I call these the 5G problems: GST was already a pain and now, GeM, GTE, GFR,” summed up a senior well-known Indian researcher. GeM is the govt e-marketplace, GTE stands for global tender enquiry, and GFR is general finance rules.
