ISLAMABAD: Pakistan Young Pharmacist Association (PYPA) has written a letter to the Prime Minister Shehbaz Sharif pointing out the general sales tax (GST) evasion of more than Rs500 billion in Pharma Sector other than Allopathic Registered Medicines.

The letter, available with Dawn, stated that the government imposed GST on Pharma Industry in March 2002 and later in October 2002 fixed zero rated GST on Allopathic Registered Medicines, where Maximum Retail Price (MRP) is fixed by the federal government.

“Herein, [other than Allopathic Registered Medicines ] on herbal medicines, medical devices, cosmetics, health and over the counter (HOTC), enlisted medicines, enlisted therapeutic goods, enlisted medical devices and veterinary medicines full GST was imposed.

“The pharma industry hands in gloves with the Drug Regulatory Authority of Pakistan (Drap) has brutally and illegally evaded GST on herbal medicines, medical devices, cosmetics, health and over the counter, enlisted medicines, enlisted therapeutic goods, enlisted medical devices and veterinary medicines like Allopathic Human Registered Medicines since 2014; and given huge loss to the exchequer,” it stated.

“Since 2014 zero GST is being collected from other than Allopathic Registered Medicines as their price is not fixed by the government,” it stated.

“The evasion of GST on other than Allopathic Registered Medicines is more than Rs500 billion since 2014, which is a huge loss to exchequer. On the top of it no prices were fixed of enlisted therapeutic goods, health and over the counter, enlisted medical devices, enlisted cosmetics etc. by Drap and poor patients are being looted in Pakistan,” it stated.

“The import Indenting companies in connivance with Drap and Pharma Industry doing money laundering through banking channels and other illegal channels amounting Rs 150 billion annually,” it stated

The premier has been requested to direct to start collecting GST from Pharma Industry manufacturing / importing herbal medicines, medical devices, cosmetics, HOTC, enlisted medicines, enlisted therapeutic goods, enlisted medical devices and veterinary medicines,

“Recover entire evaded GST since 2014 from Pharma Industry and Drap, stop money laundering through banking and other channels, check the import business of all indenters, fix prices of all enlisted therapeutic goods, health and over the counter, enlisted medical devices, enlisted cosmetics etc. Start criminal probe on evasion of GST since 2014,” it stated.

General Secretary PYPA Dr Furqan Ibrahim, while talking to Dawn, said that in 2002 then Finance Minister Shaukat Aziz, who later became prime minister, imposed GST on medicines and edible items.

“Then it was decided to withdraw GST on human allopathic registered medicines and edible items. However, there was GST on ayurvedic medicines and medical devices. In 2014, Drap issued a Statutory Regulatory Order (SDRO) and put ayurvedic medicines, vitamins and medical devices in the enlisted therapeutic goods. As price of enlisted therapeutic goods is not fixed due to which all of them were exempted from GST,” he said.

Dr. Ibrahim hoped that the prime minister will look into the issue and will ensure the recovery of the looted money.

Published in Dawn, May 28th, 2023