The Government of Himachal Pradesh may go back on its decision to impose Rs 5 per kg levy on selected goods including medicines for entry and exit from the state soon. The government's second thoughts are based on the realization that the tax in its current form could drive away the industrial units from the state.

According to sources, Virbhadra Singh, Chief Minister, HP has assured the representatives of pharmaceutical industries of an early solution to this problem. The industry leaders had met the CM on Saturday. The CM is also known to have agreed to put the new notification in abeyance until a formal roll back is announced.

The industry will now have to wait for a week before a fresh notification can be expected, sources said. Interestingly, the fresh notification may also have an entry tax proposed, but in a miniscule manner.

The decision of the State Government that came on Thursday had called for levy for both entry of raw materials and exit of finished formulations. The industrialists, especially the pharma manufacturers who had flocked to HP during the recent years found to their shock that the tax means an extra Rs 50,000 burden on each truckload of medicine. Being a price-controlled item, the manufacturers were at a loss to explain the peculiar situation to the National Pharmaceutical Pricing Authority (NPPA) for reflecting the changes in the final product. The representation before the CM was part of their immediate reaction to the whole development.

Calling the government decision as a breach of trust, the pharma industries had said that the tax sops where the only attractive factor for companies to set shop in the state. Once the tax hurdle arises, few units would remain in the state, they had warned the CM.