Pharma Companies can’t claim tax benefit for freebies given to doctors
Freebies given by pharma companies to doctors, medical practitioners to influence their prescription of medicines can’t be claimed by the drug firms as ‘business expenditure’ to reduce their tax liability.
The Supreme Court ruled and noted that acceptance of these freebies by doctors is punishable by the Medical Council of India (MCI) code of ethics also.
A Bench of Supreme Court comprising justices UU lalit and S Ravindra Bhatt dismissed Apex Laboratories’s appeal against the Madras High Court’s judgement that upheld the I-T department’s decision to disallow the assessee’s claim seeking tax benefit of expenses made towards gifting freebies to doctors for creating awareness about the company’s products.
Supreme court says that, “These freebies are technically not ‘free’ – the cost of supplying such freebies is usually added into the drug selling prices, resulting into prices up. which is not good for public.
