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Medicament makers plea to Revenue Board against levying sales tax

ISLAMABAD (July 19 2003) : The manufacturers of medicaments have approached Central Board of Revenue (CBR) against the Collectorate of Sales Tax, Lahore, for allegedly demanding sales tax on medicaments.

They claimed that the medicaments are exempted from this levy.

In a written complaint to CBR a Lahore-based company alleged that tax officials of Lahore were wrongly classifying the medicaments under new PCT heading to levy sales tax.

The company produces 'Murabbajat' including black myobalan, quince, rose, apple, wood apple, colocynth, phylianthus, carrot and ginger.

The Murabbajat, being Unani medicine, are classifiable under heading 3003.9010 of Pakistan Custom Tariff (PCT) and are exempt from sales tax under SRO 555(I)/2002.

The classification of 'Murabbajat' has never been doubted as these items are classified under heading 3003.9009.

Unani practitioners used to prescribe 'Murabbajat' for the treatment of specific patients and these products are integral part of Tibb Pharmacopoeia.

The company said that collectorate of sales tax, Lahore also endorsed this viewpoint, but later the regional tax officials were classifying the product under heading 20.08 of PCT for recovery of sales tax on the same.

The unit claimed that the effort of the department to classify Murabbajat under heading 20.08 was meant for extorting revenue even when it is not due.

The CBR should make it clear that 'Murabbajat', being Unani medicine, are classifiable under PCT heading 3003.9010 and are not liable to sales tax.

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