Indian chemists shut shops Tuesday to protest VAT

Wednesday, 26 March 2003, 08:00 Hrs
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NEW DELHI: Over 400,000 chemists across India downed their shutters Tuesday to protest against the introduction of the Value Added Tax (VAT) from April 1.

The chemists have decided to intensify their protest in the days ahead if the government doesn't keep medicines out of the VAT purview, said a member of All India Organisation of Chemists and Druggists.

According to the association, the introduction of VAT, which seeks to end inter-state competition by levying same sales tax on goods in all states, would badly affect chemists and force small traders to close shop.

The imposition of VAT would encourage sale of cheaper counterfeit drugs, as original medicines will become costlier, said an association member. He said if VAT is implemented, prices of many drugs could rise by as much as 15 percent.

"This is because under VAT taxes will be levied at multiple points, first at the level of the manufacturer, then at the level of the wholesaler, and finally at the level of the retailer," he said.

As of now, sales tax is levied only at a single point when the manufacturer sells to the wholesaler. The VAT regime was originally due to be introduced in April last year but wad later postponed because of disagreement among various states.
Source: IANS
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