September 7, 2002	Saturday	Jamadi-us-Saani28,1423

LAHORE, Sept 6: Finance Minister Shaukat Aziz on Friday announced that pharmaceutical manufacturers will be allowed refund equal to the amount deposited by them as General Sales Tax (GST) for the period between July 1 and 31 this year.

The CBR will sort out the modalities and issue an SRO in this regard within couple of days, he assured a delegations of Pharma Bureau and Pakistan Pharmaceutical Manufacturers Association (PPMA) at Pakistan Administrative Staff College.

Secretary general, finance department, Moeen Afzal, and CBR chairman Riaz Malik were also present.

Saying that the drug manufacturers need not pay any GST for medicines supplied from August 1 onwards, Mr Shaukat asked them to ensure through their distributors and retailers to deface medicine packets/bottles, etc., in the market so far as entries relating to the GST were concerned. He asked them to ensure that all medicines, except around five per cent of the total quantity of medicines imported into the country, should be provided to the customers without any burden of GST.

The finance minister said the Ministry of Health officials would check retail sales to ensure that the patients are getting full benefit of the government’s decision.

He said the GST was levied on medicines on March 21, but soon afterwards 256 life saving medicines were given exemption. But, he said, the whole matter regarding the levy of the value added tax on medicines remained under review. Consequently, President Pervez Musharraf granted exemption to all drugs and medicines on August 23, and restored the exemption status prevailing before the levy of the tax on medicines.

Mr Shaukat said that he, at the time of withdrawal of GST on medicines, had announced that no GST would be charged from the customers with immediate effect. However, he said, certain complaints had been received through the Press about the breach of the decision in some instances. Moreover, the manufacturers complained of difficulties as large stocks of drugs remained with the distributors and in the supply chain for a period of two months or so. As a result the manufacturers would have to pay the tax on yet-to-be-sold medicines, though the same could not be charged to the customers nor could the retailers and distributors be expected to suffer any loss on this account.

He said the government held discussions with all stakeholders and took a decision to remove the genuine difficulties to ensure that the buyers get GST-exempt medicines at the correct price.

The minister said the pharma sector should grow more and produce quality medicines at cheaper rates. He also asked the manufacturers to focus on exports to the Central Asia, Middle East and beyond. He said the government would give tax benefits to the medicine exporters.

He said the government had also constituted three committees to work on the patent law, deregulation and taxation. PPMA president Dr Khalid Javed Chaudhry said withdrawal of the GST on medicines is a great step forward. He also urged the finance minister to develop checks and balances for the sales department that it should drag and torture the pharma industry. He assured that the industry would cooperate and supply medicines at affordable prices.

Pharma Bureau chairman Juergen Koenig said the multinational pharmaceutical industry would now be able to protect the cause of the consumers.