KARACHI, March 27: Medicine importers have stopped clearing their consignments from the port after the levy of a 15 per cent General Sales Tax on imports besides suspending opening fresh letters of credit.
“Our members will neither clear their consignments from the port nor will they open L/Cs for at least the next 10-15 days, hoping that the government may consider our request of withdrawing the 15 per cent GST on pharma products,” the Senior Vice Chairman of the Pakistan Pharmaceutical Importers Association (PPIA), Qaiser Waheed Shaikh, told Dawn on Wednesday.
There are around 55 pharmaceutical importers in Pakistan, importing drugs mainly from China, Europe and Korea, he said. He added that around two million US dollars worth of drugs of our only 4-5 leading importers are stuck up at the port soon after the increase in sales tax.
“All the importers are now taking with one another other to work out an arrangement to absorb the impact of the 15pc sales tax in the larger interest of consumers,” he said, adding that the Association could control the wholesalers and retailers from fleecing the consumers.
A large number of retailers in the city have already started charging new prices on their own despite the fact that the drugs are not carrying new price labels.
Mr Shaikh said around 600-700 drugs were those whose prices were above Rs500, and consumers would be hit hard after paying the additional 15pc sales tax on these drugs.
It would really be a tough time for patients of high blood pressure, sugar, cardiac and neurology to swallow the bitter pill of galloping inflation by paying the additional 15pc on various drugs. According to an international survey, there was no GST on medicines anywhere in the world, not even in Europe and the USA.
He urged the government to withdraw its decision in the largest interest of the public who were already groaning under the burden of so many taxes and due to inflation.
According to the Federal Bureau of Statistics, imports of pharma products during July-February 2001-2002 stood at $145 million (Rs9 billion) as compared to $154 million (Rs8.7 billion) in the same period of 2000-2001.
The Pakistan Chemists and Druggists Association 9PCDA) at its central executive committee meeting on Tuesday also urged the government to withdraw the 15pc sales tax on locally-produced and imported drugs.
The Chairman of the PCDA, Mohammed Ilyas Nainitalwala, told Dawn that the markets had still a few days’ stocks of old price tags as the pharma companies had not completed their work of printing of new price labels on medicines.
He said distributors, who had stopped supplying drugs to the markets two days back from the old stocks, resumed their supplies from Wednesday.
The government is reported to have asked the local manufacturers not to pass on the full impact of the 15 per cent sales tax and absorb the 7-8 per cent of the total levy. “It is still not clear whether these companies will pass on the full impact or follow the government’s instructions,” he said.
However, these companies had asked their distributors to release the old stocks, Ilyas said. Distributors were expected to receive new consignments from the companies in the next 4-5 days with new price stickers, he said. “I think these companies will pass on the full impact of the GST,” he added.
He claimed that his members, ranging between 10,000 to 15,000 all over the country, were not charging prices on their own, but market reports suggested that some non-member retailers were demanding 1-2pc more than the actual price.
The total annual sale of drugs in Pakistan is estimated at more than Rs45 billion.
