Case 1: Bulk Drugs

Old System (LST) New System (VAT) Baddi Incentives

Inputs:
Cost 100.00 100.00 100
Plus: Central Excise 16.32 16.32 16.32
Sales Price 116.32 116.32 116.32
Plus: CST 4.65 4.65 4.65
Plus: Surcharge 0.47 0.00 0.00
Plus: Turnover Tax 1.16 0.00 0.00
Sales Value 122.60 120.97 120.97

Set-offs Available:
Central Excise 16.32 16.32 0
LST / VAT 0.00 0.00 0

Total Input Costs 106.28 104.65 120.97

Value Added 200.00 200.00 200.00
Sub - Total 306.28 304.65 320.97
Add: Central Excise 49.99 49.72 0
Sales Price 356.27 354.37 320.97
Plus: CST / LST / VAT 14.25 14.17 3.21
Sales Value 370.52 368.55 324.18

Net Central Excise 49.99 49.72 16.32

Net LST / CST / VAT Paid 18.90 18.83 7.86

Benefit of VAT implementation 0.34

As percentage of Sales Price 0.09%
As percentage of MRP 0.03%

Benefit of Baddi over old system 44.71

As percentage of Sales Price 13.79%
As percentage of MRP 4.47%

Benefit of Baddi over VAT 44.36

As percentage of Sales Price 13.69%
As percentage of MRP 4.44%

Notes:
1. In the first case, the bulk drugs manufacturer is assumed to be in Baddi, while every other manufacturer is assume

2. In the second case, the formulations manufacturer is assumed to be in Baddi, while every other manufacturer is as

3. In Baddi, the following incentives are available:

100% excise duty exemption for 10 years
100% I-T exemption for 5 years, followed by 30% for the next five years
sales tax deferment for 5 years and central sales tax at 1% for 10 years
Besides the availability of cheap power at Rs 2.5 per unit is also making a big difference
 Case 2: Formulations
Old System (LST) New System (VAT) Baddi Incentives

306.28 304.65 304.65

49.99 49.72 49.72
356.27 354.37 354.37
14.25 14.17 14.17
0.00 0.00 0.00
0.00 0.00 0.00
370.52 368.55 368.55

49.99 49.72 0
0 0 0

320.53 318.83 368.55

400.00 400.00 400.00
720.53 718.83 768.55
117.59 97.92 0
838.12 816.75 768.55
75.43 40 40
913.55 856.75 808.55

117.59 97.92 49.72

89.68 54.17 54.17

55.18
6.44%
5.52%

103.38
12.79%
10.34%

48.20
5.96%
4.82%

very other manufacturer is assumed to be outside Himachal Pradesh

hile every other manufacturer is assumed to be outside Himachal Pradesh

Player Taxes paid under old system Taxes paid under old system
Central Excise CST / LST Central Excise VAT

Chemicals

Bulk Drug

Formulations Manufacturers

Pharma Company-Maharashtra

Stockist(Inter State)

Whole Sellers

Retailers
 Taxes paid in Baddi
Central Excise VAT

NA NA

NA NA

NA NA

NA NA

NA NA