Why VAT on Albumin?
We are taken aback to learn that 15 percent VAT has been proposed on albumin which is considered to be a life saving drug for patients suffering from serious kidney and liver problems. The drug is considered to be a plasma (blood) substitute, which basically helps increase the volume of blood in blood vessels. Albumin is already subject to AIT (4 percent) and advance trade VAT (5 percent) making it a very expensive drug for patients. So, we agree with patients that a further 15 percent VAT on this medication will drive up the price to such an exorbitant level that it will have serious ramifications for patients who have no substitute to fall back upon.
In an age when cancer cases are going up by record numbers and where albumin is administered to patients before a blood transfusion is administered to newborns suffering from haemolytic disease (which destroys red blood cells in the body), it is imperative that the ministry of finance seriously rethink before slapping the proposed uniform VAT on such a drug. In most countries of the world, life saving drugs are kept off the VAT list because unless this is done, we can look forward to smuggling of the drug from neighbouring India which has no such levy on the drug. This will on the one hand be a loss for the government as it loses revenue since the smuggled medication will be cheaper than the ones imported. But more importantly, the move will place a huge financial burden on patients who are already stretched thin on counting the cost of medi-care in the country. We urge authorities to look into the matter and keep life saving drugs off the uniform VAT rate of 15 percent in the interest of public healthcare.
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