The states of Haryana, Assam, Karnataka and Andhra Pradesh are finally likely to bring the medicines under the 4 per cent MRP on first point basis. These states had implemented VAT across all sectors, but were in dilemma whether to bring forth the multipoint VAT or the first point on MRP for medicines.

States like Madhya Pradesh, Himachal Pradesh, Delhi, Haryana, Punjab and Goa are also to implement the new taxation regime for medicines, although they have been VAT-compliant from April 1, 2005.

States including Maharashtra, West Bengal, Kerala and Orissa have already implied the 4 per cent tax on medicines.

States like UP, Tamil Nadu, Chattisgarh and other BJP ruled states are yet to implement VAT.

It is on the demand from the traders that the empowered committee of state finance ministers allowed a 4 per cent tax based on first point. The pharmaceutical traders had resorted to strike and stop purchase of pharma stocks in states like AP and Karnataka when their demands were not met by governments in these states.