The Pharmaceutical companies and the trade in Tamil Nadu are in a state of confusion over the state government decision to move towards VAT. The TN government had recently stated that it would take steps to implement VAT only if other states also decide so even if that would mean a possible revenue loss.

The state government is still to come out with the policy on VAT. And this has caused a lot of uncertainity in the pharmaceutical industry as well as the trade. Top government sources however were silent on the issue of how and in what shape the Tamil Nadu government will implement the VAT system. It is to be mentioned in this context the Tamil Nadu recently submitted its Bill on VAT to the Centre. The Bill is still to be cleared although the Centre had assured that it would get the Presidential consent on the Bill by March 11.

While the pharmaceutical industry is concerned about the pricing of the products, the pharma trade is confused over the set off to be given on stocks at the time when the VAT would be implemented.