Chemists and druggists have heaved a sigh of relief after the Kerala government decided to defer the implementation of VAT. However, the All Kerala Chemists and Druggists Association has warned the state government of choking supply of drugs if the Kerala government went ahead with the implementation of VAT.

The Kerala government did a U turn when it announced that it is deferring the implementation of VAT after claiming it would switch over to the VAT from April 1, 2003. It now has said that it would implement the VAT only after other states do so.

Life saving drugs, it can be recalled, had been exempted from VAT in the Kerala budget announced for the next financial year. However, the All Kerala Chemists and Druggist Association was at loggerhead with the Kerala government over the issue of VAT on other medicines for it claimed that same would result in rise in prices of the medicines.

"For now the Kerala government has decided to defer the implementation of VAT. However the association would choke supply of medicine if VAT is imposed even at a later date. We have no other go," said N.A. Mohan, General Secretary, All Kerala Chemists and Druggists Association.