Special Correspondent

Reports of VAT impact denied

CHENNAI: An association of retail chemists and druggists in Chennai and neighbourhood said sufficient medicines were available in all the shops and there was no scarcity of the products as a result of value added tax to which the State moved on Monday.

Instead the four per cent tax on medicines under VAT meant a 6.5 per cent reduction in the levy on them under the Tamil Nadu General Sales Tax regime that was in force till Sunday.

Apart from reducing the prices for the consumers, the relatively lower levy would also attract more entrepreneurs to establish the manufacturing facilities in Tamil Nadu, said N. Balaraja, general secretary of the Chemists and Druggists Association Retail.

Addressing presspersons on Tuesday, he said the Association wanted to meet Chief Minister M. Karunanidhi for these measures and for halving the compound rate of tax on the dealers with a turnover up to Rs.50 lakh to 0.5 per cent. An overwhelming majority of the association members come under this category and stood to benefit.

On reports about scarcity of medicines on Monday, he said there was no significant shortfall in the availability and even that was on account of three consecutive holidays when supplies to the shops were limited.

Besides on account of VAT, there had also been a sharp reduction in the prices of several medicines following implementation of the Drug Price Control Order (DPCO) by the Centre. The drop in the prices, going up to as much as 50 per cent in certain generic products, was now getting extended to branded products too. The association, according to Mr. Balaraja, appeals to the State Government to subsidise electricity to the retailers, provide computers to them at a concessional price towards enabling them to comply with the VAT provisions, and protect the small retailers from the large players.

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