KARACHI, May 20: Large consignments of imported drugs and medicines worth over Rs400 million have been lying at the port for last two months over a dispute of payment of 15 per cent general sales tax. As a result of this many medicines are running in short supply in the local market.

Over three dozen containers loaded with life saving drugs and other medicines, not manufactured locally, are awaiting customs clearance because the importers of these drugs and medicines are reluctant to pay 15 per cent GST.

These consignments mostly belong to those importers who had opened letters of credit (LCs) and executed their shipments prior to the levy of 15 per cent GST on medicines and drugs on March 21, 2002.

Importers apprehend that if they meet the demand of the customs authorities and pay the disputed 15 per cent GST this will result in heavy losses as they had already made advance sale of these medicines at the old rates and prior to arrival of these consignments.

“I had established my L/C much prior to the levy of disputed 15 per cent sales tax on medicines and as a normal practice I had also made advance sale of the booked consignments without taking into account the impact of sales tax,” a leading drug importer told Dawn.

“Now, if I pay sales tax at import stage who will ensure that the amount paid on this account will be refunded to my buyer, who had already finalized the deal without taking into account the impact of 15 per cent GST,” he asserted.

Dr. Mushtaq Noorwala, vice-chairman, Pakistan Chemists and Druggists Association (PCDA), told Dawn on Monday that his association has also taken up the issue with the government and hoped some positive results will come out.

However, he was highly critical about the role of the bureaucracy and said long delay in resolving the issue might have deteriorated the quality of such a sensitive cargo like medicines and drugs.

Dr. Mushtaq further said that drugs carried limited shelf-life and delay in clearance was to result in expiry of dates, which in turn will waste the country’s precious foreign exchange in millions of dollars.

The imposition of GST on medicines and drugs, he said, had no logic as it was an essential commodity used by all classes of the society and its consumption was based on compulsion and necessity.

To a question, he said his association had taken up the issue with the government for withdrawing GST on all medicines as no one could categorise which drug or medicine was life saving and which was not.

The PCDA vice-chairman said the association had also taken up the issue with the CBR for clearing all consignments of imported medicines without levy of GST as importers could not afford to sustain heavy losses for no fault on their own.

“It is true that many fast moving and life saving drugs are no more available in the market and the patients are suffering badly due to non-availability of these medicines,” he added.