Tamil Nadu - Chennai   

Drug position in State comfortable

Special Correspondent

Following extension of VAT reimbursement

CHENNAI: With the State Government extending Value Added Tax reimbursement to all purchasers of drugs, the State now has comfortable stocks of drugs and the scarcity situation forcast by pharmaceutical companies has been tided over.

Chemists and druggists in Tamil Nadu had expressed the fear that a situation of scarcity of drugs might arise from January 1, the day from which the VAT regime implementation began. Their fear arose from the perception that stockists would run huge losses on old stockpiles if the tax component paid on the goods purchased before December 31, 2006 was not reimbursed to them.

Then, they had demanded that they be allowed to enter the VAT regime six months after it was officially launched in the State and had also asked that tax compensation be provided to all pharmaceutical stockists, irrespective of whether they were the first, second or third purchasers of the products.

Currently, according to a Government order, the amount traders have already paid as tax for stocks bought before December 12, 2006, will be deducted from the VAT amount that they have to pay the Government from January 2007. The arrangement has been satisfactory for the druggists and chemists. While some uncertainity existed over the past week, the issue has been clarified to both stockists and smaller pharmaceutical shops and the drug position is back to being steady, according to representatives from the Chemists and Druggists Associations.

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