August 27, 2002	Tuesday	Jamadi-us-Saani 17,1423

KARACHI, Aug 26: Drug manufacturers are considering a proposal to lift general sales tax (GST)-paid stocks from the distributors and the markets, and replace them with fresh non-GST stocks.

Under the proposal, they would leave a credit note of rate difference with the distributors and the note would also be valid for the stocks, the distributors would take back from the market, market sources told Dawn on Monday.

Prior to lifting of GST, some drug manufacturers, in letters, had assured their distributors of taking back the GST stocks from them as well as from the market and would replace them with fresh ones.

Copies of some letters had been made available to Dawn by the chemists and druggists.

According to letters, companies, who had given assurance to their distributors included Atco Laboratories, Chas A. Mendoza and Novartis.

According to the sources, the levy of GST had already resulted in the reduced sales.

Chairman Pakistan Chemists and Druggists Association (PCDA), Ilyas Nanitalwala has confirmed that many pharma companies are finalizing the strategy these days to replace the GST-paid stocks.

He said chemists and druggists are also contacting the manufacturers for the early implementation of their decisions, which they had taken before the withdrawal of the GST.

Some retailers said that the government may consider a mechanism to adjust the GST already paid on the medicines against the taxes levied on the input materials used in drug manufacturing. The government had issued a notification on August 23 forbidding any person to claim or take refund of any amount of sales tax already paid by or recovered from him.

Meanwhile, consumers are still running from pillar to post to buy medicines without the GST levy, but unfortunately they were yet to avail of this benefit.

A random market survey reveals that all retailers are still charging the 15 per cent GST on drugs from the consumers.