Kerala has become the first state in the country to allow sale of dietary supplements, surgical devices and allied medical products through retail chemist outlets at 4 per cent Value Added Tax (VAT), similar to life saving drugs, instead of the existing 12 per cent tax classification as per the VAT regime.

The State Finance Minister Vakkom Purushothaman announced this at Thiruvananthapuram last week and an ordinance to this effect has been promulgated, said sources. ‘Dietary supplements, surgical devices and allied medical products which are generally prescribed by medical practitioners and sold through retail chemist shops will be classified under 4 per cent of Maximum Retail Price (MRP) by the state government, announced the minister.

As reported earlier by Pharmabiz, the All Kerala Chemists and Druggists Association (AKCDA) had brought this issue to the notice of the Taxes Commissioner citing Central Excise Tariff Code numbers 3001 to 3006 on drugs having provision to extend the same 4 per cent category of taxes applicable to food supplements or nutraceuticals as it could be classified under the ‘other such products’ category.

Trade sources said the decision of the government would bring about 100 to 200 such products, including surgical items, surgical devices, IV sets etc. sold through the medical shops under the 4 per cent VAT regime. Many of these items, like Proteomix dietary supplement, are normally not available in provision stores or super markets, and most are sold as per the prescription of doctors.

Kerala, like the state of Delhi, already allows tax exemption to about 12 products like vaccines, insulin, contraceptives, blood and blood products.