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Indian Pharmaceutical Alliance pitches for exception of GST on expired and damaged drugs

A Raju, Hyderabad
Tuesday, November 14, 2017, 08:00 Hrs  [IST]

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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