The Bangalore District Chemists & Druggists Association (BDCDA) has urged the Karnataka government that it should withdraw sales & purchase invoices, make amendments to collect value added tax (VAT) on pharmaceuticals with manufacturer and marketer as per Drug Price Control Order 2013 and modify VAT form 105.
The Association has also requested to ensure that short message service (SMS), email, telephone calls and notices of penalising its members on upload of sales and purchase invoices issued by the Karnataka commercial sales tax offices are discontinued.
In a representation to Karnataka chief minister, S. Siddaramaiah BDCDA insisted to withdraw the Notification No.CCW/Cr 44/2013-14 dated 29.04.2014 regarding uploading of sales & purchase invoices. The primary reason indicated was that in pharmacy trade it is engaged in selling over 3 lakh brands of drugs governed by the Drugs & Cosmetics Act & Rules. The Drug Price Control Order 2013, indicated fixing prices of the drug at a VAT has to conclude MRP inclusive of taxes and also on payment of added taxes by the pharmaceutical industry manufacturers.
BDCDA met the Karnataka chief minister Siddaramaiah during the state’s pre-budget meeting and requested to look into these issues as it impacted the earnings of the pharmacy trade.
“Our trade is over 95 per cent tax complaint. The minor percentage of leakage of taxes is due to the lacunae in VAT act and rules. As the government levies taxes on commodities on the consumers, the taxes have to be collected when a sale is effected, but unfortunately we dealers are paying VAT when we effect a purchase from our investment and the same is taken from the consumer when the sale is down. We wish to indicate that there is no profit on the tax payment paid by. Now considering the infrastructure of pharmacy trade, we have requested for payment of tax on MRP and the government was kind enough to provide us with an amendment of opting payment of VAT on MRP,” stated V Hari Krishnan President, The Bangalore District Chemists & Druggists Association.
The Association has also expressed its inability to upload sales and purchase invoices as per the notifications issued by the commercial tax department. It has now requested its commissioner to stop the SMS, email and telephone calls besides issuance of notices penalising its members for the same, he said.
With regard to modifying the VAT form 105, the BDCDA president pointed out that necessary changes were mandated to collect VAT from the manufacturer or the marketing company based on the ceiling price as per DPCO 2013.
“We also have a problem because many brands date of expiry is fast approaching. For these drugs, the VAT is already paid which amounts to a loss anywhere between 27 per cent to 50 per cent for the unsold products. The pharmacy trade does not get any claim for the VAT paid. Therefore, the Association is looking for a benefit of Average Margin with a percentage for the payment of VAT on goods held by us till a sale is effected, said Krishnan.