ISLAMABAD, Sept 4: The government is likely to refund the amount accruing on account of 15 per cent General Sales Tax (GST) to the drug manufacturers on their unsold drug stocks in a bid to pass on the benefit of withdrawal of GST on medicines to common consumer.
A decision to this effect is expected at a high-level meeting on Thursday to be attended among others by secretary general finance, Mueen Afzal and chairman Central Board of Revenue (CBR), Riaz Ahmed Malik.
Talking to Dawn, the chairman, Pakistan Chemists and Druggists Association(PCDA), M. Ilyas Nainitalwala said that if the decision taken, the drug manufacturers would lift the unsold stocks from the distributors, wholesalers and retailers and replace them with fresh non-GST stocks.
Elaborating on the mechanism, Mr. Nainitalwala said that the manufacturers would give credit note against the GST paid on those unsold stocks lying with the distributors, wholesalers and retailers, while the stocks will be replaced with the fresh ones to them.
He said that the drug manufacturers would adjust the credit at the time of fresh buying.
To compensate the drug manufacturers against the payment they paid on the unsold GST paid stocks, the chairman said that the government should adjust it against the duty leviable on the material used in the manufacturing of drugs like packing materials, glass, bottles, vial, ampule, cotton etc.
He said that they have also asked the government that in case they were reluctant to pay GST on the unsold stocks, then they should give the average of the GST paid on the drugs up to withdrawal of the same.
He said that they have a preliminary meeting on Wednesday with the secretary general and senior officials of the CBR to work out a workable solution to the problem. He was accompanied by vice-chairman, PCDA, Dr. Mushtaq Noorwala and chairman, Punjab zone, Mahmood Amin.
The chairman said that if the decision taken, PCDA would make an appeal to all the retailers across the country not to charge the GST on the drugs from the consumers.
The consumers are yet to bye medicines without the GST levy as was announced in the notification issued on August 23. The same notification has also forbidden any person to claim or take refund of any amount of sales tax paid already by or recovered from him.