KARACHI: The proposed exemption restoration in Sixth Schedule may lead to serious financial shock to the pharma manufacturers because input tax on supplies to charitable hospitals would not be refunded.

Ejaz Bhutta executive director, Moore Shekha Mufti contended that Finance Bill 2022 includes a proposal to exempt the supply of goods to charitable hospitals. If the proposal is carried out in the Act, the pharma industry will not be eligible for a refund of input tax on such supplies. Therefore, charitable hospitals may face trouble in securing medicine supplies directly from manufacturers. Ejaz was of the view that effectively, the cost of medicine for charitable hospitals will increase under this amendment.

He pointed out that the export of medicines to Afghanistan is already excluded from the facility of zero-rating. Furthermore, no proper mechanism for smooth issuance of a refund to the pharma sector has been devised yet. Therefore, the pharma industry may face liquidity crises ultimately affecting the supply chain of life-saving drugs in the country.

Copyright Business Recorder, 2022