PESHAWAR, Jan 26: The chemists are still charging the people 15 per cent general sales tax on the medicines which the government withdrew in August 2002.
Many chemists in the city told Dawn on Sunday that they were taking the tax from the people as the multinational pharmaceutical companies had not reimbursed the money under the head of the 15 per cent GST, which the firms had charged them before its withdrawal by the government.
The government had imposed the 15 per cent GST on all forms of medicines on March 20, 2002, but later exempted 256 drugs, which were classified as life-saving drugs.
However, in the wake of countywide protests by the chemists, the government formed a committee of the representatives of the ministries for health, commerce and finance to look into the drug pricing mechanism. In the light of the committee’s report, the then finance minister, Shaukat Aziz, announced the withdrawal of GST on all medicines on Aug 22, 2002.
“Five months have passed since the withdrawal of the GST on the drugs, but the manufacturing companies, especially the multinational firms are reluctant to refund the tax and many chemists are still charging the 15 per cent GST from the patients,” said a medical store owner. According to him, the government had issued directives to the manufacturers, importers and suppliers to take back the stock from the chemists and re- supply the stuff, without the GST, but the directives fell on deaf ears.
He claimed that the manufacturers had also been directed to re-pack the drugs and slash the GST amount from the prices, but in vain and subsequently the patients were being fleeced.
“The companies do not pay the GST to the government, because it had already refunded the amount which was charged from them,” a chemist said, adding that they had no option but to sell the commodity to the people on the rates, inclusive of the GST.
He said that the local companies had already replaced the stock and refunded the amount to the drug-sellers.
Some chemists argued that they had paid the GST to the wholesalers and they were passing it on to the consumers. According to them, the wholesale outlets from where they had purchased the stock were unwilling to refund. The retailers argued that if they were compelled to sell the drugs without the GST, there would be a shortage of drugs which would cause more harm to the patients.
They said that the government had failed to reign in the multinational companies, which had paved way for the smuggled medicines from India and Iran to capture the markets.
The multinational companies sold the same product at 500 to 1000 per cent higher rates in Pakistan than they did in India, a chemist claimed.
