CAG blames I-T Dept for Rs 1348 cr tax loss in pharma sector

New Delhi : Coming down heavily on the I-T Department, CAG has said non-compliance of procedures for giving incentives to pharmaceutical firms, including Ranbaxy, Dr Reddy’s and Piramal, resulted Rs 1,348.44 crore loss to the exchequer. The Comptroller and Auditor General in its report on the pharma sector said the I-T Department allowed firms to claim benefits on R&D expenses without verification, while assessing officers (AOs) allowed expenses on freebies and gifts to doctors despite such a practise being illegal. Citing the example of IPCA Laboratories, CAG said the company had incurred expenditure of Rs 32.91 crore on “Heart Touching Celebration, sponsorship of doctors and corporate/ brand recall items”.