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Indian Pharmaceutical Alliance pitches for exception of GST on expired and damaged drugs
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A Raju, Hyderabad
November 15 , 2017
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The Indian Pharmaceutical Alliance has been pitching with the government
to exempt Goods and Services Tax (GST) on drugs that are expired or
damaged. As per the new GST rules, there is no exemption for expired or
damaged drug products from GST preview, because of which the industry is
expected to lose Rs.500 crore annum.
In
view of this, the Alliance has given its representation to the GST
Council to find a way out and save the pharma industry from losing
hundreds of crores for the medicinal goods that are not sold or
consumed. Usually the retailers send back all their expired or damaged
stocks to the pharma companies. However while doing so they will
generate an invoice which will again attract a GST on the date expired
and damaged drugs, because of which an additional cost burden is being
imposed on the pharma companies in the form of GST.
“Our
contention is that, why should there be a GST for the goods that are not
sold and that are damaged. We feel that it is a very serious concern
and have already written to the GST council to look into the matter and
find a way out. We are hoping that the GST council will come out with
positive terms and conditions favouring the pharma companies,” said D G
Shah, Director General of the Alliance.
The Alliance, which is a
conglomeration of big pharmaceutical companies across the country, have
been arguing that GST must be imposed on product sales and on their
consumption but that may not be applicable in cases, where medicines
overshoot their expiry date or are damaged. This is a major issue, says
Shah, since, under the current provisions, there is GST imposed on these
too and this means, based on current estimates, it costs about Rs.500 crore per annum for the industry.
We
have been continuously giving our representations and issues being
faced by the pharma companies to the government from time to time. We
are hoping that the GST council will definitely come out with positive
solutions and save the pharmaceutical industry from the loss, says the
Director General.
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