The All India Organisation of Chemists and Druggists [AIOCD] has resumed the purchase of stocks from the pharma companies as usual after the Value Added Tax [VAT] was deferred by the Union government for the time being. "We have resumed purchases of total stocks from the pharmaceutical companies," said J.S. Shinde, General Secretary, AIOCD.
Following the decision of the Union government to implement VAT from April 1, the pharmaceutical traders had agreed to cut down their purchases from the companies. "As there was no clear cut strategy from the Union government regarding the repayment of the arrears, we had to cut down on our purchases," he said. The AIOCD sources had also claimed that, due to their low stock purchases during the month of March, the pharmaceutical companies across the country should have incurred a loss to the extend of Rs 450 crore.
However, the AIOCD now deferred the opinion that VAT will now come back to picture only in 2005. "Union government dearly wants VAT to be implemented during the current year. The true picture will be revealed during the meeting of the state finance ministers on May 8 and 9," Shinde added.
In the meanwhile AIOCD has submitted a fresh proposal in this regard to Asim Das Gupta, Chairman of the empowered committee on VAT. The new trade submission has suggested changes as - inclusion of medicines in the essential commodity list, uniform tax on medicines all over the country and uniform list for tax exempted, no levy other than VAT by any states, exemption of medicines from VAT, and to put medicines under MRP inclusive of all taxes category. The association has also requested the CEP for rebate of tax paid on the stocks of March 31 2003 to be adjusted in the regular course of business immediately in the succeeding months or only difference in tax should be collected from dealer. The Association has requested for only one common audit by the authorities relieving its members from the burden of dual audits.
It feels that the penalty and interest for minor offences should be made mild. The unlimited powers, endowed upon the authorities are bound to be misused breeding corruption, which has to be brought down. Finally, AIOCD has urged the CEP to delete all the provisions of criminal punishment, making room only for administrative punishment /penalties for defaulters.