Impact of GST on Indian pharmaceutical industry: An overview

Dr. Jayashree; R Kotnal

Impact of GST on Indian pharmaceutical industry: An overview

Authors
Dr. Jayashree, R Kotnal

Abstract
As GST is almost ready to implement from July 2017, every organization has started to make future strategies. Currently, Indian drugs are exported to more than 200 countries in the world. India is the largest provider of Generic drugs medicines globally and expected to expand further experiencing a boom in medical industry which will help in generating additional returns for the Industry.

Goods and Service Tax is expecting to have a positive impact on the Indian Pharmaceutical Industries as it will decrease the manufacturing cost, since eight different taxes are levied in the pharmaceutical industries helps in easy going business. It will eliminate the cascading effect of multiple taxes applied on one product.

Beside some positive impact, there are some negative impacts also. As GST is applicable on phases of the supply chain, it will have negative impact on Free-drugs samples, Bonus/Discount Schemes, Inter-state stock transfer, etc. Pharmaceutical companies will experience improved operational efficiency, reduced manufacturing & transaction costs as well as improved compliance.

Overall Impact of GST on the Pharmaceutical Industry is still uncertain as of now. It will reduce complexities and hurdles. It needs to be Tax Free under GST Regime to maintain the prices at Optimum Level.

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