How Will GST Effect PCD Pharma Products And Industry? – GST has rolled out and is making waves in the Indian pharma industry. The initial rates and prices of various medicines and drugs have left the people dumbstruck. The introduction of uniform HSN code and GST rate has impacted the lives of pharma people a lot. Want to know how will GST effect PCD pharma products and Industry? Here we go!
Impact Of GST On Indian Pharma Industry
The Pharma industry of India is growing vastly. The government support in various taxation points has made the industry it is today. The new taxation law of Goods and Service tax (GST) has been making rounds since its roll out in July 2017. The government of India plans to make the inventory network service efficient through GST execution. This will help diminish the cost of assembling pharma products, medicines, and services.
GST has brought a string of confusion in its first few days. The impact has been neutral due to highlighting negative and positive impacts. We have discussed some of the angles describing the impact of GST on Indian pharma industry and its various sectors:
HSN Code For GST
The follow up of GST rates and HSN (Harmonized System of Nomenclature) code saw negligence in billing system in its first days. The old MRP stocks were sold at old prices due to the failure of companies to provide the revised price list.
The retail outlets and the owners are much in dilemma as for how to invoice bills on GST. The impact is yet to be stable as the huge stock is yet to finished and replace by new MRP rates. The government has given a time of six months to clear the left out stock. They need to make the declaration and pay GST on it to the government. This will happen on a monthly basis with a detailed description.
The Chapter 30 of HSN code displays the classification of pharma medicines, drugs, and products. Migrating of old data to new information technology systems may take time. This means bills will be forever saved and linked online.
Many people buy pharma products at GST with the bill but resale with a bill. A prescribed bill is very useful in providing benefits. Skipping a bill means the person bear the cost and it won’t be useful in any case. You won’t get the input tax credit claim for non-billed items. These are assumed to be seller’s share of the cost.
Excise Duty-Free Zones
Excise duty-free zones were one of the main reasons why pharma industry was growing rapidly over decades. The roll-out and final dates of extract free exclusion zones are soon to come to an end. This has left many pharma companies worried.
Earlier taxes were paid to a range of 12% or more but for extract free exclusion zones it was 1.5 percent. Going under the knife of basic expense section give a blow to small pharma companies. The declaration is yet to be made under this whether the free zones will continue or come to an end.
GST Effect on Pharma Manufacturing Industry
The manufacturers are facing the wrath of GST the most. The HSN code for each drug attracts certain tax. The majority of drugs attract 12 percent. Those who merely fall under nil percent tax or 5 percent tax have a little relief. The raw material used to make the drugs is categorized in slabs but not their raw material. The taxation for raw material is same for all sectors fixed at 18 percent.
The manufacturing of promotional tools like free samples, discounts, and other items are bound to be costlier due to the supply of chain. The assembling units may have to endure a considerable measure of GST effect even in excise free zones.
Conclusion:
The GST roll out is still a neutral decision by the Indian government. It is still felt that the impact is yet to be stable. GST takes into account 8 different indirect taxes. It is a unified way of taxation. Thus, you pay once for all. PCD franchise is growing strong is yet to take shape with time as GST becomes stable in the minds of the pharma people.