The Hindu Business Line : No VAT on life-saving drugs, medical kits in Delhi

Medicines in general attract a VAT rate of four per cent. This was decided at a meeting of the Delhi Cabinet that was called to review the situation arising on account of VAT implementation.

About 50 life-saving drugs and devices, vaccines approved by the World Health Organisation (WHO), glucometers and syringes are among the 14 categories of items exempted from VAT.

Other items exempted include husk, bran, oiled cake and de-oiled cake, `dhoop-battis'/`agarbattis', scrap glass, scrap glass bottles, hosiery items costing up to Rs 50 and footwear costing up to Rs 300.

"Since the implementation of VAT, we got representations from various associations. Accordingly, we have corrected some of the lapses that existed in VAT legislation," Ms Sheila Dikshit, Chief Minister of Delhi, told pressperson.

Meanwhile, the Delhi Government has decided to take up with the Empowered Committee the issue of VAT on diesel. Delhi has pegged the rate on diesel at 20 per cent. But Haryana and Punjab has pegged it at lower rates.

"We have assessed the impact of increase in the tax on diesel and found that there has been a 40-50 per cent fall in diesel sales in Delhi," Ms Dikshit said.

The Delhi Chief Minister said that she had spoken to the Chief Ministers of Punjab and Haryana. She, however, held that the two Chief Ministers do not want to increase the tax on diesel, as their farmers are using it.

"We will forcefully take up the issue with the Empowered Committee and ask that Delhi be spared (from hiking tax on diesel)," she said.

Ms Dikshit added that her Government would propose a reduction on cooking gas from 12.5 per cent to four per cent.

The Delhi Government has now exempted plastic waste, khadi readymade garments, lac, grass seeds, vegetables and flowers from VAT. Further, about 159 items have been identified as industrial inputs that would attract a rate of four per cent. While silk fabric would enjoy exemption, silk sarees will attract four per cent. Utensils, including those made of aluminium and stainless steel, and kitchenware, except crockery, will have a four per cent VAT rate.

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