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Expenditure on free samples/ gifts to doctors allowed by Tribunal- Circular is not retrospective

Income Tax - Direct Tax Code - DTC - By: - CA DEV KUMAR KOTHARI - Dated:- 15-2-2016 - Relevant references and links: Section 37 (1) of Income-tax Act, 1961. Circular No. 5/2012 Dated 1-8-2012 found on https://www.taxmanagementindia.com/Print/print_circular.asp?ID=11763 Judgment holding circular valid: Confederation of Indian Pharmaceutical Industry (SSI) Versus Central Board of Direct Taxes and Union of India 2013 (7) TMI 387 - HIMACHAL PRADESH HIGH COURT Recent judgment of ITAT: Syncom Formulat .....

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very much required to provide information to doctors. Therefore, providing such samples to doctors is very important and are measures of dissemination of information and to promote sale. When competitors are providing samples, it becomes imperative to provide samples otherwise, the product will gradually forgotten by doctors who prescribe medicines. Therefore, distribution of samples to doctors is as per trade practices and are out of commercial expediency. Sample are not for sale: On such samp .....

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ce of site seeing or meeting relatives and friends in city of conference. But that does not make such freebies as illegal or improper. Though there must be some check and balances to avoid mal practices. Circular of Board: The CBDT has issued circular (supra) instructing disallowance of cost of samples and other gifts provided to doctors by medicine manufacturers ,equipment manufacturers. The Board took view that as per law applicable to professional ethics applicable to doctors they cannot acce .....

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needs. There was a time when any doctor (even a Vaidya was considered to treat all ailments. Now time is of specialisation and research and development. There are more new products, and also increased obsolescence of ole products. Therefore, more information need to be exchanged. There is also intense competition at worldwide level, for this reason also more advertisement and publicity is required. In case of medicines and allied products for medical treatment, in fact consumption and sale is b .....

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reebies given to medical practitioners) by manufacturer is not prohibited under any law for the time being in force. Giving small gifts bearing company logo to doctors does not tantamount to giving gifts to doctors but it is regarded as advertising expenses. Sponsoring doctors for conferences and extending hospitality, pharmaceuticals companies have been sponsoring practicing doctors to attend prestigious conferences so that they gather contemporary knowledge about management of certain illness/ .....

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ake them suitable according to changing times. Guidelines should be practical and not impractical. If any such guidelines are not keeping pace with time, they will find violation and concerned people may be forced to find out some routes and indirect ways to give and receive gifts. Other aspects: TV Serial Ek Nayi Ummeed - Roshni - showed malpractices in private hospitals: In this regard author recalls that a TV Serial Ek Nayi Ummeed - Roshni was started [premiered on 13 July 2015 and broadcast .....

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