IMPACT OF GST ON COST OF MANUFACTURING· It has impacted price of the products andcontracts with retailers/distributors.· It has impacted the primary sales andprofitability of companies in Pharmaceutical sector· The cost of manufacturing has gone up by 7% andtherefore the product price has to be marked up to bear the impact.· GST on ingredients used in allopathic medicalcare and other health-related items for tablets, capsules and liquids fallin three categories at 18%, 12%, 5% and zero. · A lot of food and medicine supplements nowfall in 18 and 28% GST brackets leading to hike in price.· Most of the formulations for medicines fallinto 12% GST bracket against the 9.5% VAT bracket (VAT + Excise duty).
· All types of contraceptives and Human bloodand its components have no GST on them.· The manufacturing cost has been affected asmany raw materials for Active PharmaceuticalIngredient (API) and products fall in 12% GST bracket against the 5% VATbracket earlier.· The GST rate of Ayurvedic products is 12% asmany of the ayurvedic products are used in manufacturing of cosmetic product.
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IMPACT OF GST ON SUPPLIERS/ VENDORS· GST has led to the elimination of Clearing& Forwarding (C&F) Agents.· Everyone in the supply chain has to getregistered to avail the benefit of Input tax credit. This will ensureefficiency in supply chain.· The life-saving essential drugs like the Oralre- hydration salts, Diagnostic Kits for detection of all types of hepatitisand various other life-saving injections ad drugs fall under the slab of 5%.· When GST was implemented there wasnon-uniformity of billing system at pharmacies due to the lack of awareness foroperating the new software and migrating the data as per the new system.· Some of the chemists were selling themedicines without the GST number on their bills.· Post GST, there was a lack of supply from theside of the wholesalers; the retailers feared a shortage of drugs inpharmacies.
IMPACT OF GST ON CUSTOMERS· When GST was implemented, medicines were soldat the pre-GST MRP due to the non-availability of new Batches with post-GST MRPmedicines at pharmacies and stockist.· Customers were not getting bill due to thenon-updating of billing system.· The prices of Insulin and critical-careproducts for kidney ailments and cancer as well as anti-retroviral hascome down. GOODS & SERVICE TAX (GST) RATES S No. Chapter/Heading Description Rate (%) 1 3002 Human Blood and its components Nil 2 3006 All types of contraceptives Nl 3 30 Insulin 5 4 3002, 3006 Animal or Human Blood Vaccines 5 5 30 Diagnostic kits for detection of all types of hepatitis 5 6 30 Desferrioxamine injection or deferiprone 5 7 30 Cyclosporin 5 8 30 Medicaments (including veterinary medicaments) used in bio-chemic systems and not bearing a brand name 5 9 30 Oral re-hydration salts 5 10 30 Drugs or medicines including their salts and esters and diagnostic test kits, specified in List 1 appended to this Schedule 5 11 30 Formulations manufactured from the bulk drugs specified in List 2 appended to this Schedule 5 12 3001 Glands and other organs for organo- therapeutic uses, dried, whether or not powdered; extracts of glands or other organs or of their secretions for organo-therapeutic uses; heparin and its salts; other human or animal substances prepared for therapeutic or prophylactic uses, not elsewhere specified or included 12 13 3002 Animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; toxins, cultures of micro-organisms (excluding yeasts) and similar Products 12 14 3003 Medicaments (excluding goods of heading 30.
02, 30.05 or 30.06) consisting of two or more constituents which have been mixed together for therapeutic or prophylactic uses, not put up in measured doses or in forms or packings for retail sale, including Ayurvedic, Unani, Siddha, homoeopathic or Bio-chemic systems medicaments 12 15 3004 Medicaments (excluding goods of heading 30.02, 30.05 or 30.06) consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses (including those in the form of transdermal administration systems) or in forms or packings for retail sale, including Ayurvedic, Unani, homoeopathic siddha or Bio-chemic systems medicaments, put up for retail sale 12 16 3005 Wadding, gauze, bandages and similar articles (for example, dressings, adhesive plasters, poultices), impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes 12 17 3006 Pharmaceutical goods specified in Note 4 to this Chapter i.e.
Sterile surgical catgut, similar sterile suture materials (including sterile absorbable surgical or dental yarns) and sterile tissue adhesives for surgical wound closure; sterile laminaria and sterile laminaria tents; sterile absorbable surgical or dental haemostatics; sterile surgical or denatal adhesion barriers, whether or not absorbable; Waste pharmaceuticals other than contraceptives 12 18 30 Following goods namely:- a. Menthol and menthol crystals, b. Peppermint (Mentha Oil), c. Fractionated / de-terpenated mentha oil (DTMO), d. De-mentholised oil (DMO), e.
Spearmint oil, f. Mentha piperita oil 12 19 30 Nicotine polacrilex gum 18