Indian Government notified Pharma manufacturers to strictly follow anti-profiteering clause under GST

New Delhi : With taking care of the consumers’ rights, the government instructed pharma companies to pass benefits of the lower tax rates to the consumers and comply with the anti-profiteering clause in the GST. Depart of pharmaceuticals clearly stated that the price of the scheduled drugs would be 95% of the current ceiling price exclusive of GST  as excise duty is levied on the maximum retail price.

Under the GST regime, Price rule for non-scheduled medicines clearly stated that the pharmaceutical manufacturers would have to bear any burden due to the higher taxes, which can increase the price of the drug more than the permissible 10% increase over their levels in the previous 12 months.

The Indian Drug Manufacturer‘s Association (IDMA) Deputy Secretary General, TR Gopalakrishnan said that
the medicines that are not under price control are allowed an annual 10% price increase in line with WPI (Wholesale Price Index) to cope with the inflation. TR Gopalakrishnan also added that they have a meeting with the NPPA (National Pharmaceutical Pricing Authority) regarding one time allowance this year. They also requested Department of Pharmaceuticals regarding this.

Anti-profiteering clause makes profit sharing mandatory with the consumers with the reduction of the tax rates.  Now the impacts of GST can be seen after 1 July, 2017. GST (Goods Service Tax) will definitely bring a change in the structure of the current pharma manufacturing and distribution services.

Indian government is actively participating not only in the building, amending of the laws but also the implementation. We all can hope this GST will serve the nation in the improvement of the country. Still, the demands of the retailers and stockists are under process. Best Heath services are the basic rights of the citizen and Government should ensure the availability and affordability of the medicines.


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