Medicine shops observe 'bandh' against VAT

All the wholesale and retail medicine shops observed ‘bandh’ in Lucknow on Wednesday to protest against the hike in value-added-tax (VAT) on surgical instruments from 4 to 12.5 per cent.

The UP Chemists and Druggists Federation (UPCDF) has also warned of a UP ‘bandh’ after 15 days, if the state government does not reverse its “illogical” decision.

There are about 1,800 retail and 800 wholesale medicine shops in Lucknow district, which observed the ‘bandh’.

According to a rough estimate, business worth Rs 35-40 crore could not be transacted due to the closure, while the people faced a tough time.

About 500 medicine traders also took out a march in the state capital to register their protest and submitted a memorandum to the state government, demanding immediate roll back of the VAT hike.

The Federation reiterated that the hike would encourage smuggling of surgical items from the neighbouring states of Delhi, Madhya Pradesh, Rajasthan, Bihar and Uttarakhand.

All other states have uniform VAT of 4 per cent on surgical items except UP. This hike will result in smuggling of over Rs 60 crore worth of surgical items per month into the state, Federation general secretary Suresh Gupta said.

Due to the smuggling, the state government revenue collection will also suffer substantially, he added.

The Federation had recently met senior officials of the state tax department and urged for the VAT roll back.