ADEH demands to reverse decision of ITAT which grants tax relief to pharma company on rupees 23 crore freebies to doctors

Ludhiana, January 24, 2017: The Alliance of Doctors for Ethical Healthcare (ADEH) has demanded through a letter addressed to the Chairman Central Board of Direct Taxes (CBDT) to reverse the decision of the Income Tax Appellate Tribunal (ITAT) which has granted tax relief to a pharma company on rupees 23 crore freebies to doctors.
In a statement on behalf of ADEH, Dr G S Grewal – Former President Punjab Medical Council (PMC) and Dr Arun Mitra – Former Chairman Ethical Committee PMC & Senior Vice President Indian Doctors for Peace and Development (IDPD) said that this is a very disturbing decision as it will justify corruption by the pharmaceutical companies in promoting their products. The freebies add up to the cost of out of pocket expenditure on the healthcare by the patients. It is a well known fact that many pharmaceutical companies offer bribes (the so called incentives) to promote their products. A glaring example of this is flyers which had been allegedly distributed by one Pharma company in one national conference to incentivize doctors to prescribe its vaccines – “Get a digital weighing machine free for an order of 100? or ‘ five-gram gold coin for orders of 150’.
Dr Grewal and Dr Mitra pointed out that the CBDT had a issued a circular No.5/2012 (F.No.225/142/2012-ITA-II dated 01.08.2012 highlighting that expenditure incurred for providing freebies by the pharmaceutical and allied healthcare sector industry or any tax payer shall be inadmissible U/S 37(1) of the Act being an expenditure prohibited by law. In the light of this the decision of the appellate authority is violation of its own act and is contrary to the very objective of natural justice to provide healthcare to all.
It is unfortunate that the Uniform Code of Pharmaceutical Marketing Practices has not been made mandatory till date. This code prohibits the pharma companies from giving freebies. The doctors are however prohibited by the Medical Council of India from accepting gifts, travel facilities, hospitality cash or monetary grants from pharmaceutical and allied healthcare. Such double standards on the part of the government having different rules for the doctors and the pharma companies are not acceptable.