Impact supply chain has to get registered

Impact of GST on Cost of manufacturing

·       It has impacted price of the products and
contracts with retailers/distributors.

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·       It has impacted the primary sales and
profitability of companies in Pharmaceutical sector

·       The cost of manufacturing has gone up by 7% and
therefore the product price has to be marked up to bear the impact.

·       GST on ingredients used in allopathic medical
care and other health-related items for tablets, capsules and liquids fall
in three categories at 18%, 12%, 5% and zero.

·       A lot of food and medicine supplements now
fall in 18 and 28% GST brackets leading to hike in price.

·       Most of the formulations for medicines fall
into 12% GST bracket against the 9.5% VAT bracket (VAT + Excise duty).

·       All types of contraceptives and Human blood
and its components have no GST on them.

·       The manufacturing cost has been affected as
many raw materials for Active Pharmaceutical
Ingredient (API) and products fall in 12% GST bracket against the 5% VAT
bracket earlier.

·       The GST rate of Ayurvedic products is 12% as
many of the ayurvedic products are used in manufacturing of cosmetic product.

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 get
registered to avail the benefit of Input tax credit. This will ensure
efficiency in supply chain.

·       The life-saving essential drugs like the Oral
re- hydration salts, Diagnostic Kits for detection of all types of hepatitis
and various other life-saving injections ad drugs fall under the slab of 5%.

·       When GST was implemented there was
non-uniformity of billing system at pharmacies due to the lack of awareness for
operating the new software and migrating the data as per the new system.

·       Some of the chemists were selling the
medicines without the GST number on their bills.

·       Post GST, there was a lack of supply from the
side of the wholesalers; the retailers feared a shortage of drugs in
pharmacies.

Impact of GST on customers

·       Initially, medicines were sold at the pre-GST
MRP due to the non-availability of new Batches with post-GST MRP medicines at
pharmacies and stockist.

·       Customers were not getting bill due to the
non-updating of billing system.

·       The prices of Insulin and critical-care
products for kidney ailments and cancer as well as anti-retroviral has
come down.

 

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

 

x

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