The Confederation of Indian Pharmaceutical Industry (CIPI) is planning a nation-wide agitation objecting to the new MRP inclusive all taxes regime if the government does not resolve the issues related to the policy before its implementation.
In a meeting with the Minister for Chemicals and fertilizers, scheduled on July 13, 2006, the confederation will demand revision of ceiling price on drugs by National Pharmaceutical Pricing Authority (NPPA), uniform implementation of Value Added Tax (VAT) throughout the country and to resolve the confusion of the industry on the Weights & Measures Act before implementing the new policy.
"We are planning to seek extension of the date of enforcement, fixed as 2nd October 2006, if government cannot resolve these issues before the date. If the government proceeds with enforcement without solving the issue, the Confederation will protest the implementation," T S Jaishankar, chairman, CIPI told Pharmabiz.
He said that though the CIPI has already pointed out the need for ceiling price revision in its representation to the Chemicals and Fertilizers Ministry, before the notification, the government has not considered the matter while issuing the order. Varying rates of sales tax and service taxes in many states have to be avoided through proper implementation of VAT. Some states like Tamil Nadu and UP have not implemented VAT yet.
Mandating the MRP inclusive tax policy will be more useful to the players at the central excise free zone, as the companies are exempted from excise duty and can leverage more income from the customers, commented Jaishankar.
As Pharmabiz reported earlier, the CIPI has demanded the government that the NPPA should issue uniform guidelines for the factorization of divergent local tax structure and the 4 per cent CST levied on all interstate transactions should be taken into account. The confederation has also called for more time to implement the amendment before the notification was published.