KARACHI: The private sector has proposed the tax machinery to charge pharmaceutical products, raw materials and packaging materials on zero rating for sales tax purpose and should be removed from the list of exempted items.
It is also suggested that alternatively sales tax paid by pharma companies should be adjustable against corporate income tax.
The private sector said that sales tax being paid on packaging material utilities and other supplies used in manufacturing pharmaceutical products is adding to the product cost.
In existing situation, the final product is exempted from sales tax, the tax paid can neither be passed on to the consumer nor can be claimed as input tax. It is considered against the philosophy of sales tax which is supposed to be borne by the consumer.
The private sector has recommended that higher customs duties on medical nutritional supplements should be reduced to the same rate as applicable for products classified as medicines.
It said that essential nutritional supplements; Ensure and Glucerna help in improving health and well- being of consumers fall under HS 2016.9090 (food preparations not elsewhere specified or included others) and are charged with 30 percent customs duty on import thereof.
It is mentioned that both the formulations have a scientific rationale and they are most used as nutritional supplements by old, debilitated and convalescent persons or diabetics so the customs duties should be reduced.
Moreover, the private sector has suggested the government to reduce high protective tariffs on certain raw materials and place it to the same rate as applicable for other pharmaceutical raw materials.
Quality of locally manufactured, for instance Ibuprofen BP Paracetamol and Ciprofloxacin raw materials are enjoying tariff protection which is not consistently compliant with BP specs. For such an important and essential drug alternate option of import should be allowed and tariff be reduced accordingly.