Impact of GST on Pharmaceuticals: An Overview

Authors: Kinjal V*, Parvaiz AP and Neelam S

DOI: 10.23880/oajpr-16000156

Volume 2, Issue 2

Abstract

GST also known as the goods and service tax is defined as the giant tax structure designed to support and enhances the economic growth of our country. More than 150 countries have implemented GST so far. GST is an indirect tax system which takes account expenditure done through sale, manufacture, and consumption of goods & services at a national level which mainly involves companies, industries and services. The GST Rates for medicines were decided by the GST council. GST is levied under 5 different rates, namely NIL, 5%, 12%, 18% and 28% based on the HSN code of the item. GST is expecting to have a positive impact on the Indian Pharmaceutical Industries as it will decrease the manufacturing price since eight different taxes are levied in the pharmaceutical industries helps in easy going business. Beside some positive impact, there are some negative impacts also. A Drug Price Control is issued to make sure that the costs of vital medicines are fixed in such a way that they are affordable for everyone. According to the revised list issued by the National Pharmaceutical Pricing Authority( NPPA), prices of the majority drugs have come down, which includes a list of antibiotics and drugs for treating cancer, HIV, diabetes. GST also affects the Business Strategy of Pharmaceutical Companies.

Keywords: GST a giant tax structure; Economic growth of country; Indirect tax system; GST rates; GST council; HSN code; Eight different tax; positive and negative impact; DPCO and essential medicines; NPPA and price control; Business strategy

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