Owners of pharmaceutical units in Himachal Pradesh Friday said the booming industry would collapse if the government did not withdraw a new road tax.
"A tax of Rs.5 per kg on every incoming and another Rs.5 per kg on every outgoing pharmaceutical good is sky high and unheard of," Arun Rawat, general secretary of the Baddi, Barotiwala, Nalagarh Industries Association, said here.
"Such a tax has not been imposed anywhere in India and will make the pharmaceutical industry unviable, forcing us to close shop in the state," said Rawat.
"Representatives of the entire pharmaceutical industry in the state met top state government officials Friday here to explain their point of view and we hope the government will withdraw this levy at once," he said.
Currently almost 60 pharmaceutical units, including top multinational brands, are producing drugs in the state and a whopping 750 more such units have registered to start production soon, largely due to a tax holiday incentive of the government.
"Himachal has emerged as the fastest growing region for the pharmaceutical industry in the country but the new road tax by the government will make it impossible for us to continue and will eventually force us to leave the state," warned Susheel Khanna, CEO, Vetra pharmaceuticals.
The tax is being imposed on pharmaceuticals and 21 other items. All trucks leaving and entering the state since Thursday are being asked to pay on the spot, say industrialists.
"It often works out to around Rs.50,000 per lorry (truck)" said Khanna.
The hill state's industrial cluster largely falls in Solan district.
No one from the government was available for comment, but sources say the step has been taken to raise revenue from the booming industry.
Officials say the state government has attracted over Rs.92.11 billion ($2.1 billion) due to the tax holiday package extended by the central government for the last two years.