ISLAMABAD, Sept 6: The pharmaceutical industry has agreed to immediately start supplying products without GST to distributors and retailers, the executive director, Pharma Bureau, Zafar Mooraj, said on Friday.

In a statement, he welcomed the formula which had been agreed upon by the government and the pharmaceutical industry.

He said the industry would ensure that all stocks in the pipeline were either replaced or GST that had been printed on the medicine packets erased after verification.

He said the formula was devised following extended discussions between the government and the pharmaceutical industry which focussed on the issue of 15 per cent GST on stocks in the supply chain on which sales tax had already been realized.

He explained that the government had agreed to allow refund/adjustment of sales tax already paid by the companies for July and August against their tax liabilities. This will be a partial adjustment against the GST on unsold stocks in the distribution channel including distributors, retailers and wholesalers. However, no further refunds will be allowed by the government.

He expressed the hope that this agreement between the government and the industry would provide relief to consumers who were continuing, in some cases, to bear sales tax on stocks which were already in the pipeline prior to the government’s announcement of removal of sales tax from August 23.

On Thursday last, the representatives of the pharmaceutical sector including the Pakistan Pharmaceutical Manufacturers Association (PPMA), Pharma Bureau and Pakistan Chemists and Druggist Association (PCDA), had asked the government to waive the condition it had inserted while withdrawing the 15 per cent GST on medicines, and allow the refund of sales tax already paid on the medicines.

They have insisted to delete clause (2) of SRO 555 (1)/2002 under which it has been declared by the government that no person shall be entitled to claim or take refund of any sales tax that has already been paid or recovered from him.