About traditional Chinese medicine decoction pieces enterprises

The current policy stipulates that agricultural products fall within the scope of low value-added tax rate, and Chinese herbal medicines, including Chinese herbal pieces, fall within the scope of agricultural products, and the tax rate of 13% applies. Value-added tax for the production of proprietary Chinese medicines The general taxpayer purchases duty-free Chinese herbal medicines sold by agricultural producers, or Chinese herbal medicines purchased from small-scale taxpayers, and the input tax is deducted according to the purchase price and deduction rate 13%; Chinese herbal medicines purchased by general VAT taxpayers from Chinese herbal medicine business households are deducted from the input tax at the rate of 13%. Chinese patent medicines produced by Chinese patent medicine manufacturers are taxed at the VAT rate of 17%. This situation of low input tax rate and high output tax rate is unreasonable.

At present, the state encourages the development of modernization projects of traditional Chinese medicine, including GAP planting of traditional Chinese medicine, protection and comprehensive utilization of traditional Chinese medicine resources, research and production of formula granules of traditional Chinese medicine decoction pieces, GMP production of traditional Chinese medicine and improvement of production technology and equipment, research and development of new Chinese patent medicines and secondary development of famous and famous products.

Chinese patent medicine manufacturers are facing the reality of low product sales price, high production cost and thin profit. The main reason for the high production cost is the high price of raw materials, especially the high price of various Chinese herbal medicines as the main raw materials of Chinese patent medicines. This situation affects the enthusiasm of enterprises to develop Chinese medicine projects and restricts the development of enterprises.

What we can do now is to increase the value-added tax rate of Chinese herbal medicines. General VAT taxpayers who produce proprietary Chinese medicines and general VAT taxpayers who deal in Chinese herbal medicines purchase duty-free Chinese herbal medicines sold by agricultural producers or Chinese herbal medicines purchased from small-scale taxpayers, and the input tax is deducted according to the purchase price and the deduction rate of 17%. Value-added tax in the production of proprietary Chinese medicines Chinese herbal medicines purchased by general taxpayers from Chinese herbal medicine value-added enterprises are deducted from the input tax at the rate of 17%.

After the adjustment, it can not only reduce part of the tax burden for Chinese patent medicine manufacturers, but also improve the enthusiasm of enterprises for R&D and production of Chinese patent medicines, and also encourage farmers to plant and produce Chinese herbal medicines.