The All Kerala Chemists and Druggists Association (AKCDA) has warned the Kerala government of choking supplies of drugs if the Kerala government went ahead with the implementation of VAT. This warning has come after the Kerala government decided to implement VAT from June 1.

N.A.Mohan, general secretary, AKCDA, cautioned the Kerala government that it was inviting trouble by agreeing to implement the VAT in the state alongwith other state governments. "As already said we have no other go but to choke supply of drugs. We will be doing that for sure," Mohan said.

The sales tax on pharmaceuticals in Kerala is currently as high as 16 per cent. And in the current state budget, an entry tax and octroi were also imposed on drugs. With these two additional levies and the flat rate of 12.5 per cent under VAT, the prices of drugs are bound to shoot up in the state in coming days. This matter has been already brought to the attention of the state government by the Association while it issued warning of choking supply of drugs.

The Kerala government has not responded to the warning. It claimed that it would negotiate with the Association on any grievances and address them.