KARACHI, Aug 31: The issue, confronting the pharma industry and trade, owing to government’s refusal to refund the GST on sales tax paid stocks, is expected to be resolved on September 3.

This was assured by Secretary General Finance Mueen Afzal in a meeting with representatives of Pharma Bureau of Overseas Chambers of Commerce and Industry (OCCI), Pakistan Pharmaceutical Manufacturers Association (PPMA) and Pakistan Chemists and Druggists Association (PCDA) at the State Bank of Pakistan (SBP) on Saturday.

The secretary general listened to the problems of the drug manufacturing companies and dealers on the matters arising out from the withdrawal of sales tax on drugs from August 22.

Mueen said that he would also discuss the matter with the Central Board of Revenue (CBR) in Islamabad before coming out on any conclusion on September 3.

It may be mentioned here that the government in its notification on August 23 has not entitled any person to claim or take refund of any amount of sales tax already paid by or recovered from him.

Pharma industry and trade representatives informed the secretary general that an estimated Rs500 million GST-paid stocks of chemists, distributors and wholesalers, are lying in the supply chain which cannot be passed on in any manner to the consumers.

PCDA chairman Ilyas Nanitalwala and vice-chairman Dr Mushtaq Noorwala, who also attended the meeting, said the share of GST-paid stocks of imported medicines worth around over Rs150 million.

They said the drug manufacturers, chemists and druggists have jointly proposed the relevant aspects to the secretary general which include: A) Manufacturers and importers are directed to take back the unsold stocks (on which the sales tax has been charged but its incidence has not been passed to the consumers) as on August 22, 2002 by way of special return note.

B) Stocks, so taken back, are properly stamped to ‘deface’ sales tax. Drug Rules inter alia require that any amendment on the ‘packs’ be undertaken under the laid down procedures.

C) Sales tax attributed to the returned stocks is to be identified on the sales tax return due for the sales tax period ended on August 22, 2002.

The trade and industry people in their presentation to the Mueen Afzal have assured that all efforts would be made to maintain uninterrupted supply while implementing the aforesaid proposals.

However, a random market survey reveals that customers are still paying higher prices to buy medicines despite its withdrawal.

Dr Mushtaq said that the markets are now gripped with problems as retailers have stopped lifting stocks from wholesalers and similar practice has been adopted by the wholesalers by not lifting stocks from distributors.

There has been a shortage of medicines since the last few days due to prevailing confusion over GST refund on stocks. The shortage will definitely overcome if the three proposals of trade and industry are accepted by the government on September 3, the PCDA officials said.