The Tamil Nadu Chemists and Druggists Association (TNCDA) has urged the Union and the state governments to amend laws to include medicines in the schedule of essential commodities and have the prices controlled by the Drugs Price Control Order (DPCO) with a maximum of 4 per cent tax countrywide. This, the Association said, would bring in uniformity and lower prices of drugs throughout the country.
The Association wanted all the pending issues on the value-added tax regime resolved before it was enforced. It urged the Centre to postpone the implementation of VAT nationwide at least till July 1.
N. Anandan, general secretary of the Association, maintained that the Association demanded that all medicines sold at the maximum retail prices inclusive of all taxes. “All life saving drugs should not attract VAT as also other levies so as to avoid price disparities. Also, VAT on drugs and medicines should be charged on the first point on MRP as it would be impractical to implement VAT laws among 5.5 lakh retailers in the country. In the alternative, pharmaceutical wholesalers should be included in VAT from zero turnover and all retailer put in the compounding scheme,” Anandan maintained.
He further added that the implementation of VAT varied from state to state. “Most of the states declared their floor rate at 12.5 per cent. This would mean that from April 1, the total taxes would come to more than 16.75 per cent (plus MRP) instead of the prevailing MRP plus 7 to 8 per cent,” Anandan added.
Anandan also maintained that if the government did not do justice to the retailers in VAT implementation, the chemists and druggists would refuse to purchase medicines from April 1, 2003. “This would create a shortage of life saving drugs for which we should be not be held responsible,” he added.