Three days after the Himachal Pradesh government introduced a controversial goods tax, it has been put on hold because of stiff opposition from a section of the state's business lobby.

"We welcome the chief minister's decision to immediately put on hold imposition of the goods tax on 22 categories of incoming and outgoing goods," said Arun Rawat, general secretary of a local industries association.

"A tax of Rs.5 per kg on all incoming and another Rs.5 a kg on outgoing pharmaceutical goods would have led to the collapse of the pharmaceutical industry," Rawat told Sunday on phone from New Delhi.

On Friday, angry owners of Himachal Pradesh's booming pharmaceutical industries met Chief Minister Virbhadra Singh and top officials to demand the removal of the levy.

"Such a tax has not been imposed anywhere in India and would have made the pharmaceutical industry unviable, forcing us to close shop," said Rawat.

Currently, 60 pharmaceutical units including multinational brands are producing drugs in Himachal Pradesh and a whopping 750 more units have registered to start production soon, largely due to a tax holiday announced by the government.

"Earlier this week, each lorry carrying pharmaceutical goods across the state's border was asked to pay Rs.20,000 to Rs.80,000. This worked out to (an average of) Rs.50,000 a truck," said Rawat.

The hill state's industrial cluster largely falls in Solan district.

Officials said the state had attracted investments of over Rs.92.11 billion ($2.1 billion) due to the tax holiday package extended by the government over the past two years.