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 With the rollout of GST 2.0 scheduled for September 22, 2025, the Retail Distribution Chemists Alliance (RDCA) in Delhi has raised serious concerns over the financial burden the transition will place on pharmaceutical distributors and retailers.
In a detailed letter to pharmaceutical industry partners, RDCA president Sandeep Nangia has appealed for urgent, practical support to ensure a smooth shift and uninterrupted supply of medicines.
The revised GST rates, which reduce tax on various pharma products from 12 per cent or 18 per cent to 5 per cent or even zero per cent, are designed to benefit patients. However, Nangia highlighted that the manner of implementation is creating overlapping credit cycles that are putting immense pressure on cash flow. Purchases made just before and just after the GST cut are falling under the same payment due window, effectively doubling outflow for small traders.
“For example, a distributor buying stock worth Rs.10 lakh on September 23 must pay by October 30. If they also purchase on October 21, that payment is also due by October 30. So instead of easing pressure, it creates an unsustainable financial spike,” Nangia explained. He stressed that such compression in the credit cycle is counterproductive and undermines the government’s intent behind the GST revision.
To address this, the RDCA has proposed three practical solutions to its industry partners. First, it has requested a genuine thirty-day extended credit period with staggered payment cycles to ease financial pressure. Second, it recommends offering a one-time five percent cash discount on the closing stock as of September 21 to help absorb losses due to the GST revision. Third, the RDCA suggests introducing special trade discounts across ongoing products to balance the impact on retailers. These measures, the association argues, would support the trade sector in staying financially stable during this transitional period.
Nangia emphasized that small chemists are particularly vulnerable, as they are forced to sell medicines purchased at a higher GST under the new, lower MRP, leading to unavoidable losses. “The tax differential of up to 7 per cent is impossible for most small traders to absorb without relief. This could affect medicine availability and lead to unintended supply disruptions,” he warned.
The RDCA also expressed concern over the handling of returns. Any product returned after September 22 will be credited at the new 5 per cent GST rate, even if the retailer originally paid 12 per cent or 18 per cent. This discrepancy could result in significant unrecoverable losses for dealers, further straining their operations.
According to him, the spirit of GST 2.0 is to benefit consumers, and the RDCA supports it. But for successful implementation, trade and industry must work hand-in-hand. “We urge manufacturers and distributors to treat this as an urgent matter and offer practical, time-bound solutions to support the trade network.” RDCA has pledged its commitment to patient welfare but insists that long-term trust in the supply chain hinges on equitable handling of this transition.
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