“Despite all these, The Effect of GST on Medicines in India will be positive in long run, and the Indian Pharma Industry will come up to the Govt expectations as viewed in Vision-2020”
Thus, for the time being, Pharma Distributors may lose their hard earned money due to GST. The Govt should find some good solution to compensate this segment of Pharma Industry.Despite all these, The Effect of GST on Medicines in India will be positive in long run, and the Indian Pharma Industry will come up to the Govt expectations as viewed in Vision-2020″
Pharmaceutical Industry in India: GST Impact
Pharma Industry has been playing a key role in Indian Economy. India is the third largest Pharma Business Destination in the world. In terms of volume, Indian Pharma Industry contributes about 20% to the Pharmaceutical production.
Indian Pharma Exports Before GST Regime:
According to the data released by the Pharmaceutical Export Promotion Council of India, Pharmaceutical Exports from India stood at $16.8 billion in the year 2016-17. The Nodal Agency expected the figure crossing $.20 billion in the next 3 years.
‘Pharma Vision 2020’
The Government is determined to boost Indian Pharmaceutical Industry and transform the country as a Generic Medicine Hub. The Government unveiled its new Pharma Vision 2020. Under the Vision-2020, it intentds to see & at make the country a global leader in end-to-end drug manufacturing.
The Govt is working to see that the Indian Pharma Industry grows by 9-10 % by 2020.
The Govt is setting up an electronic platform to regulate online pharmacies.
The government introduced mechanisms such as the Drug Price Control Order and the National Pharmaceutical Pricing Authority to deal with the issue of affordability and availability of medicines.
The Govt has cleared the policy of 100% FDI in Pharma Sector.
The Pharma Industry in India is expected to cross $.100 Billion Marck during the decade.
GST & Pharmaceuticals:
Earlier, most of the drugs, Pharma Salts & Other Pharma Raw Materials were taxed as a VAT @ around 5%. After the beginning of new GST Regime, Drugs & Medicines have been kept under the 12% GST Slab. Other products, like health food, although not covered under drugs, a prominent part of Pharma Industry, has been kept under 18% GST Slab.
GST & Essential Medicines & Life Saving Drugs:
Earlier, all the Life-Saving Drugs & Essential Medicines were exempted from VAT. After the GST Regime, Medicines falling under the List of Essential Medicines are also kept under the GST Slab of 12%. These have seen a net increase of 2.3% in the prices.
GST & Hardships of PCD Pharma Franchise/ Pharma Distributors:
After the GST, drugs & pharmaceutical prices have seen the increase in the prices. The large size PCD Pharma Franchise/ Distributors & C& F Pharma Agencies are holding huge stocks which they had purchased under earlier Tax rates of 5%. Despite their best efforts, they could not clear all such stocks before the deadline set up by the Govt. As a result, they have to suffer a loss of 7%.
Further, the pharmaceutical companies are likely to pass the complete burden to the end consumer. This means MRP on medicines could be increased by 5%. To check the prices, Government has taken steps in ensuring drug price-controlled medicines and also ceiling MRP. This can result in a loss of 2-3% by pharmaceutical manufacturers.
Besides this, some pharma dealers/ distributors are also finding it difficult to file the GST periodical returns.
Thus, for the time being, Pharma Distributors may lose their hard earned money due to GST. The Govt should find some good solution to compensate this one of the most important segments of Pharma Industry.
Despite all these, The Effect of GST on Medicines in India will be positive in long run, and the Indian Pharma Industry will come up to the Govt expectations as viewed in Vision-2020″