Amidst Confusion, Chemists in Delhi Ready for GST
As the advent of the Goods and Services Tax (GST) looms, chemists in the city, at the very least are well prepared.
Medicine stores are all set for the switch to the new tax system. (Representative image/PTI)
New Delhi: As the advent of the Goods and Services Tax (GST) looms, chemists in the city, at the very least are well prepared. Medicine stores, especially the row of shops situated between the All India Institute of Medical Sciences and the Safdarjung hospital that cater to almost 600 to 700 patients each, a day, are all set for the switch to the new tax system.
“We got the new software two to three days ago, and our computers are updated,” said Krishna Sahni, who has been managing Sai Medicos and South Delhi Medicos, opposite AIIMS, for 10 years, as he pointed out to the new red GST label on the billing software open on his computer screen. “We’re ready, our stocks are ready, let’s see what happens,” he said.
Next door, Raj Gandhi, a pharmacist for 15 years, runs Pioneer Medicos and said some might shut shop. “Yes, some shops might shut down to re-do their inventory, or to update their systems, but we’ve already updated ourselves,” he said. “We’ve got our stocks in place.”
“There’s really no need for panic. We moved from normal tax to VAT to now GST. It’s just a name," he added. He does concede, that “some shops might shut down do re-do their inventory, or to update their systems.”
According to a report by Money Control, the “mom and pop pharmacy stores” -- which dominate the Indian pharmacy retail market, pegged at over a trillion rupees annually and growing at 14 percent -- are in trouble. They are still not ready with GST compliant billing systems and are left with a large stock in hand they may have to sell for a loss.
The report quotes Ganesh Jadhav of Ganesh Medical and General Stores, a mom and pop pharmacy store in Nerul, Navi Mumbai, saying that it will take him at least 10 days to clear this existing stock before he can sell medicines at GST rates. Another retailer from Mumbai said there is much “confusion”. “We don’t know what rates will be applicable to the stock in hand and how it will impact our margins,” the report quotes him. However, the more organised pharmacies, such as the hub near AIIMS, are ready to meet July 1.
Though medicines have moved from a 5% tax slab to a 12% one, what’s helped matters for customers, both chemists said was the notification by the National Pharmaceutical Pricing Authority (NPPA) that lowered the ceiling price of 761 medicines, so that their prices would not shoot through the roof on adding the GST element.
“It’s going to benefit a lot of customers,” said Gandhi, “You can finish a 20-day medicine course in almost Rs.200. Our margins are hit, because of the reduction in MRP, but it will help patients.” Sahni too, is stoic about the fall in prices, again saying “let’s see what happens.”
The NPPA, Friday morning, tweeted that it was “finalising post GST ceiling prices based on info received from Cos. [sic]”. The authority had asked companies to give their inputs on the revised ceiling prices by the evening of June 29, and the final price will be out on Saturday, the first day of the GST regime. It has also asked the public to report any news of drug shortages, so that the NPPA can take action.
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