The Federation of AP Chamber of Commerce and Industries (Fapcci) has complimented the state government for impressing upon the Centre to bring down the tax on drugs from 12.5 % to 4 % under the proposed Value-Added Tax (VAT) regime.
Offering major relief to traders and the industry, the Empowered Committee of State Finance Ministers on Wednesday pegged down VAT rate on medicines and certain local items from 12.5% to 4% when the new tax regime would be introduced from June. The VAT panel would meet again on April 29-30 to draw up a list of certain life-saving drugs, which may get further concessions.
Nitin K Parikh, Chairman, Trade and Commerce Committee of Fapcci, in a statement, thanked the state Chief Minister Chandrababu Naidu and Commercial Taxes Minister K Vijayarama Rao, for successfully convincing the empowered committee on VAT on the reduction of tax on drugs.
The Fapcci statement said the state government was responsive to the announcement of the move to continue the promise of tax holiday assured to the new industries in the state within the VAT framework.
Fapcci had earlier requested the state government that it was practicable to continue the facility and that the state should stand by the commitment given to the industry regarding tax holidays and continue the same in the VAT regime.
Unless this was done, the new industries started on the government's tax holiday promise would face closure, with disastrous consequences to the state economy. With regard to turnover tax, the Federation complimented the committee for reducing the turnover tax on general dealers ( non-VAT dealers), who are generally small and petty dealers, to one per cent from 1.5 per cent earlier.