What are the Impacts of GST on Pharma Products Price- GST is a type of service tax that is payable on every value addition. It is an indirect tax that a manufacturer has to pay on each added value. GST impact the prices of many goods that are available in the market including drugs and medicine. In this article, we will provide you information about What are the Impact of GST on Pharma Produce price.
From the time, GST was announced in the market. Pharma company and other people, who are into pharma connection eagers to know its impact on medicine. If you are also willing to know its Impact on Pharma Product Price then go through this article. The questions "What are the Impacts of GST on Pharma Products Price" is not only on your mind but probably on every's mind.
Brief Information about GST ( Goods service Tax)
Everyone is thrilled by the entry of GST in the market. It is a value-added tax that is applicable to every value that added in a manufacturing a product. Assume that if you are manufacturing a product and it required raw materials or other things to add, then you have pay certain amount of money on every unit that you are adding to manufacturing any product. Every sector has their own set percentage as provided by the government. Similarly, Pharma industry has also liable to provide 8 taxes that is on sale, purchase, manufacture and other service consumption.
The primary objective of GST was to reduce the cascading effect and corruption while taxations. These taxes are liable by the central government and state government of India in the condition of form C availability and non-availability. Form C is the legal document.Know the Impact of GST on the Pharmaceutical Products?
Due to the increasing and decreasing taxation rate, there is high fluctuation in product price. Not only you, the government itself confuse it. There are the lot of things to clarify. We have listed the impact of GST on pharma medicine and Drugs.
- Type of medicine that is used to treat Malaria, Tuberculosis, HIV-AIDs, Diabetes previously charge Value Added Tax around 4% but now it falls under 5% bracket
- Ayurvedic Medicine was paying 4% VAT and 1.5%. Under the influence of GST, the tax increases and become 12% on Ayurvedic Medicines that ultimately increase the cost of the product.
- Before the GST, the distribution channel was not the part of Taxation but now due to the GST, they have to register and file 37 returns on year basis.
- Manufacturing of drugs and medicine become less costly due to the low taxation rate
- Pharma companies increase the indirect tax with 60 %
- Under the influence of GST, Pharma companies are providing, free drugs, discounts, bonus, drugs samples etc.
Name of Pharma Product that has GST Rate under 5%
Following are the products range that has 5% GST Rate:- Cyclosporin
- Desferrioxamine Injection or Deferiprone
- Animal or human Blood Vaccines
- Hepatitis Diagnostic Kit
- Drugs or medicines
- Oral Rehydration Salts
- Following are the medicine that has 15% GST Rate:
- Bandages
- Wadding Gauge
- Ayurvedic Medicine etc
Impact of GST on Pharma Industry
GST was especially entered into the market to impact the different industries. Pharma Industry also got an impact. Numbers of the company experienced positive effect of GST but some industries suffer adversely. We have mentioned some of the impact of GST on Pharma Industry.- Under the effect of GST, the cascading was removed
- Due to the transparency in taxation, the corruption seems to decrease
- GST has made one market for different companies
- Pharma companies and manufacturers are giving maximum output due to low taxation in raw material
- the price of medicines is down due the presence of input tax and output tax
- The taxation system has transparency and companies ledger account become simple
