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Chemists wince at bitter VAT pill

New Delhi, March 25: Chemists and druggists across the country downed shutters today to protest against the value-added tax (VAT) regime that will kick in from April 1.

The shutdown, which left patients in hospitals and medicine buyers in the lurch, was called primarily by the All India Organisation of Chemists and Druggists (AIOCD). All states, except Delhi, Arunachal Pradesh and Himchal Pradesh have decided to implement the new system.

Traders in most northern states, who also fear a squeeze on margins once VAT comes into force, joined ranks with chemists. “Traders are opposing the imposition of VAT since it will disturb the basic structure of taxation at the grass-root level. It will bring in multi-point collection, from the manufacturer to the customer. This will raise work-load manifold,” chairman of the Delhi Rajya Vyapar Sanghathan, M.M Aggarwal, told The Telegraph. Traders in the capital will meet on Wednesday to chart their future course of action.

Sandeep Nangia, president of Retailers and Distributors chemists association of Delhi, said: “Medicines taxed at 8 per cent now will be taxed at 12.5 per cent on the maximum retail price. The burden of extra 9-15 per cent hike in prices will have to be borne by patients.”

AIOCD has sent its representation to Asim Dasgupta, chairman of the empowerment committee of state finance ministers, the Prime Minister, chief minister and finance ministers of all states seeking classification of medicines as essential commodities with maximum 4 per cent tax all over the country. Life-saving drugs fall either in the zero duty or the 4 per cent category.

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