The All India Organisation of Chemists and Druggists {AIOCD}, OPPI and IDMA, in their recent meeting held on March 12 has urged the Union government to keep the Value Added Taxes {VAT} rate at 4 per cent instead of the proposed 12.5 per cent. This was jointly decided by AIOCD, OPPI and IDMA at its latest meeting held on March 12. A rejoinder in this regard has been already submitted to the Chairman of the empowered committee of state finance ministers Asim Dasgupta. Confirming the news, an IDMA official said that the final resolution would be taken after another meeting on March 17.
The organisations want the VAT on drugs and medicines to be in same lines with that of agricultural produce. "The Union government has considered agricultural produce to be essential and has granted VAT of only 4 per cent on them. Every one knows that drugs and medicines are equally essential to humanity as agricultural produce and should also be charged equally at 4 per cent," said a senior official in AIOCD.

The organizations have also asked for a uniformity in VAT laws across all states. "The Union government should ensure that no state government in future should charge any thing extra to the VAT," he said. The AIOCD would hold a one-day strike on March 25 if nothing positive comes from the government till then. "We may go on an indefinite strike if the issue goes unresolved," said the AIOCD official.

According to the IDMA official, the retailers are going to be hit the maximum by the multipoint VAT. "The multipoint nature of taxes in the regime is likely to cause more confusion and corruption in the system," he said. Further there is a possibility of the costumer to bear an additional tax burden of 4-5 per cent by this system. The government has also posed strict penalties for misuse of the rules. "If a retailer is not able to make the payment to the government on time he will be charged with a fine," he said. The fine charged would be in the range of Rs. 100-150. According to the norms a 100 per cent billing is mandatory in VAT, which is not possible because of the infrastructure bottlenecks, he said.

According to AIOCD sources, there is less likelihood of the Maharashtra government passing its VAT Bill in the state assembly on March 22. "The government is likely to pass the Bill sometime later as it will need some time to think over the matter," he said.