Impact of GST on Indian Pharmaceutical Industry
GST or the Goods and Service Tax, came into effect on July 2017 in India. Currently, 150 nations all across the world have implemented this tax, which happens to be an indirect system. It takes care of the account expenditure carried out with the sale, consumption of goods and manufacture and services of different products at the national level. These involve industries, companies, and services. This certainly includes the Pharmaceutical Industry, which constitutes a big portion of the market. Let’s see how the GST has put its impact on the Indian Pharmaceutical Industry:
The Impact of GST on small and Top Pharma Companies
The GST Council has been responsible for deciding the GST rates for the medicines. The said body has implemented the GST in five different rates, which goes like – NIL, 5%, 12%, 18% and 28%, which depends upon the HSN code of the item. GST has added a positive impact over the Pharma industry as it can slash down the manufacturing cost. The drug cost control issues are just to ensure that the prices of important medicines are fixed making them affordable for the end-users. As per the National Pharmaceutical Pricing Authority’s revised list, the cost of most of the drugs has gone down that include HIV treatment medicines, medicines for diabetes and antibiotics and drugs for treating cancer. As there were eight different taxes, which were implemented in the pharmaceutical sector, GST has helped the businesses move easy going.
The GST has its encouraging impact on the pharmaceutical sector in India. It has reduced the cascading effect of several taxes applied on One Product. It has disconnected the Central Sales Tax and the several Interstate transactions found in between the two dealers that have helped the conventional cost and distribution model get replaced by supply chain efficiencies. This ended up making the tax impartial.