Our Bureau

Hyderabad , March 17

DESPITE assurance from the State Government that traders would be paid back the extra tax remitted in the pre-VAT regime, chemists and druggists in the State Capital observed a bandh today demanding single point levy of VAT (value-added tax) on medicines.

Over 5,000 wholesale and retail chemists and druggists suggested that VAT, if collected at the first point of sale, would help check evasions."If it is not imposed at first point, prices will vary from dealer to dealer or retailer on the same street," Dr Ghisulal Jain, President of AP Chemists and Druggists Association, said.

Explaining the reason behind probable price variations, he said while some dealers were exempted from VAT, some others paid turnover tax and VAT.

"This will create a lot of confusion among the consumers about the maximum retail price of medicines. We keep on explaining to the consumer," he observed.

The association, he said, was against implementation of VAT in the larger interests of consumers. Many chemists were not collecting taxes and selling medicines on MRP. "In the VAT regime prices of medicines will go up as chemists are required to collect VAT," he argued.

Dr Jain said the association had submitted a memorandum to the Commercial Taxes Minister in this regard.

"We will wait for two more days before taking a decision on future course of action," he said.

Earlier, addressing newsmen before inaugurating a departmental meeting, Mr K. Ramakrishna, Minister for Commercial Taxes, said sections of traders were still worried how the shift would take place.

He asked traders and dealers to approach counselling centres established at all important towns.

Referring to the tax anomalies, the Minister said chemists and druggists have been assured that they would be reimbursed whatever extra tax they may have paid on old stocks. The refund mechanism had been put in place.

Traders are being given tax information numbers, he said.

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