NPPA directs manufacturers, marketing cos to pass on benefit of reduced GST to customers

Manufacturers can ensure price compliance at retailer level through revised price list, the authority said in an office memorandum issued Wednesday.

The National Pharmaceutical Pricing Authority (NPPA) has directed all manufacturers and marketing companies of drugs, formulations and medical devices to reduce prices of products already in the market on which goods and services tax has been lowered, so as to ensure compliance and pass on the benefit to end consumers.

“All manufacturers and marketing companies are required to revise the maximum retail prices of drugs/formulations on which tax/GST rates have been reduced taking into effect the revised rates of Tax/GST,” the authority said.

The change in tax or GST rates has an impact on the fixation of retail prices of items attracting the tax, therefore, any downward change in tax should be reflected in the price and tax benefit of reduction should be passed on to consumers, it added.

The Central Board of Indirect Taxes and Customs (CBIC) Tuesday notified reduction of GST on 18 Covid related relief materials till September 30, after the GST Council approved the reductions. The rate changes will be applicable on stock already in the market.

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