Scotching rumours that GST will lead to shortage of drugs, the Karnataka Drugs and Pharmaceutical Manufacturers Association (KDPMA) and Bangalore District Chemists and Druggists’ Association have said there is sufficient stock in the supply chain to meet demand.
“There was only a slowdown in the stock holding by retail and wholesale dealers. Earlier, they used to hold stock to last 45 days, but now its 25 days. However, there is no shortage of stock. Besides, most of the pharmaceutical companies have agreed to reimburse the difference amount between VAT and GST in the transition to retail and wholesale dealers,” said KDPMA president Sunil Attavar.
He said the slowdown was because distributors and retailers trying to minimise losses owing to change in tax structure. “However, the current stock holding is adequate and patients need not panic,” he said.
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Meanwhile, although the healthcare sector, which has been outside the indirect tax ambit for various reasons, continues to be exempted under GST as well. However, this does not mean the hospital bills of patients will reduce.
According to Sameer Agarwal, Chief Financial Officer of Manipal Health Enterprises Pvt Ltd, the GST applicable on expenses incurred by hospitals continue to be a cost. “This means patient bills may not come down under GST. In fact, hospitals would have increased costs as taxes on services and prices of medicines are expected to increase broadly by 3%,” he said. However, with luxury tax on room charges being subsumed into GST, it could bring some relief to patients, he added.