On Thursday, the high court issued a notice to the ministry of finance in response to a PIL filed by the Karnataka Drugs and Pharmaceuticals Association and a couple of pharmaceutical companies.

The petitioners in their petition have sought a declaration that the free distribution of medicine samples to medical practitioners does not amount to freebies. Hence, Section 194R of the Income Tax Act, 1961 (which provides for a deduction of 10% tax at source), is not applicable.

In their PIL, the petitioners pointed out that the Centre has erred in grouping free samples given to medical practitioners with other freebies like TVs, computers, gold coins, mobiles, etc. According to them, free drugs are given by pharmaceutical companies to medical practitioners to assess their efficacy, not to promote products. The petitioners have argued that treating the drugs given to doctors as freebies and bringing them under the preview of section 194R of the Income Tax Act is contrary to the law and without any basis.

The provision of section 194R is attracted only when it amounts to giving a benefit or prerequisite. They also added that the distribution of free samples of medicine is duly authorized under the Drugs and Cosmetics Act, 1940, and is not illegal or unethical. 

(Source: https://health.economictimes.indiatimes.com/news/policy/drug-samples-given-to-doctors-not-freebies-pharmaceuticals-association-tells-karnataka-hc/94550651 )