Medicine prices to fall post GST

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As the Goods and Services Tax (GST) policy is around the corner, the chemists are avoiding storing of medicines and drugs beyond one week in anticipation of any unfavourable changes likely to occur after the introduction of GST Bill.

Nitin Maniyar, the General Secretary of Retail and Dispensing Chemist Association said that there will be no shortage of medicine across the city and the prices of medicines is likely to decrease after new GST policy.

Nitin Maniyar said that after the implementation of the GST Bill, there is a likelihood of decline in the prices of medicines and it all be cleared after the meeting which is going to be held on May 19.

“The modalities and rules of GST are still not clear, particularly on the tax refund and input credit. Uncertainty in the industry will dissipate once the rules are clarified,” said Maniyar.

A senior official of Abbott said that they are keeping in mind that their stocking-partners should not face any loss due to the GST. “We will ensure that our partner-stockists do not suffer any loss resulting from tax structure changes on the inventory they hold,” said the official. The company also requested its distributors to maintain normal inventory and ensure adequate availability of drugs during the transition phase.

The chemists have begun cutting back on the stocks and only stocking drugs that will last for 30 to 40 days. “Stocking beyond a week will not be feasible, however, patients will not be troubled. Drugs will be available for patients and we will dispense medicines in case of any shortage,” said Ramesh Sharma, manager of National Chemist, Parel.

The current rate of tax and duties on pharmaceuticals is around 9 percent and in case of drugs under price control the government should notify revised prices as per GST rate.

“Maximum retail price of medicines and trade margins are built around current value added tax rate of 5-6 per cent and the issue face distributors is who shall bear the differential tax cost if the GST rate is fixed at 12 per cent,” added Maniyar.

Read more at: http://www.freepressjournal.in/mumbai/medicine-prices-to-fall-post-gst/1063523

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