Pharma Firms Billing Under New GST Rates – GST is said to bring some negative and positive impacts on the pharma industry and its various sectors. The retail businesses like chemist shops are facing challenges due to the due to the new pharma firms billing under new GST rates.
Goods and Services Tax (GST) is the new taxation law. Out of 13 indirect tax laws, 9 are levied on the pharma industry. The introduction of HSN code, online accounting systems, revised rates etc. GST is making an impact on the pharma franchise business all over India. Pharmacy retailers and chemist shops who are in direct contact with the consumers are facing the advent of GST. Read more to know the impact on pharma firms billing under new GST rates.
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GST Impact on Retail Pharma Franchise Business Billing System
The retailer pharma franchise businesses and stand-alone pharmacies like chemist shops etc have faced utter confusion. The previous stock is yet to sell. The Government of India and many pharma companies have sent their intimation to be registered under GST network. The impact on PCD pharma franchise business and pharma retailers are as follows:
- It has created a huge confusion on how to invoice bill in accordance to GST. This has created a disparity between parties adding GST in the bill and those selling on old MRP. Pharmacy chains like Apollo Pharmacy are showing old MRP and GST differently.
- The new rates of the products and medicines are still to be declared by many pharma companies. The retailers are now embracing the old rates till new rates are declared. The new rates will be subjected to updating after the renewal of rates.
- The left over stock with old MRP rates was said to be sold within the time period of 6 months. The people have to give an account of every old stock sale at the end of the month.
- The accountability of every new or old stock has been mandatory. Non-billed items are classed as a personal expense. Thus you do not get the input tax credit benefit.
- The information-technology systems have been introduced in almost all segments.
Impact on Pharma Drugs, Medicines and Products Current Tax Law | HSN Code
The pharma medicines and products have been classified under various taxation slabs. These slabs are created according to HSN (Harmonized System of Nomenclature) code. Chapter 30 explains the pharmaceuticals products classification. The classification is made on a certain basis which has resulted in the creation of slabs.
The pharma industry has been majorly divided into slabs of nil, 5, 12, 18 and 28 percent. The classification of different products is under progress due to conflicts. There are 761 drugs sent for re-revision by National Pharmaceutical Pricing Authority (NPPA). Most of the medicines taxed raised from 9% to 12%. GST on vital drugs like insulin reduced to 5%.
GST is said to remove and unite 13 major indirect taxes. The pharma businesses are also said to face the effects of changing taxation system. The pharma franchise business is a well-known business platform for thousands. The distribution and wholesaling channels of pharma companies are said to have a good impact. The mix critical response and impact can be felt in first few months. It is expected to stabilize and the industry will regain its previous speed.