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Jun29

GST will benefit healthcare sector beside rise in price of medicines


Prof Dr,DRAM,HIV /AIDS,HEPATITIS ,SEX DISEASES & WEAKNESS expert,New Delhi,India, +917838059592


The Goods and Services Tax (GST) will benefit the healthcare sector and promote local manufacturing, industry body CII (Confederation of Indian Industries,a leading Associtions of Indurstralist in India ) said today.The GST, India's biggest tax reform since Independence, is scheduled to be rolled out from July 1.

         "This is a breakthrough tax reform and one of the biggest major milestones for the country and its industries. We are confident that the GST would boost the local manufacturing sector...", CII Medical Technology Division Chairman Himanshu Baid told PTI.The entire healthcare industry will profit from the GST implementation as it would diminish the complexities and various obstacles in the business growth, he added.At these rates, the present total tax incidence works out to more than 29 percent. If we include tax incidence on account of CST, octroi, entry tax, etc., the present total tax incidence would work out to more than 31 percent. As against this, the proposed GST rate for cement is 28 percent.                

         There will be lesser tax burden in case of Medicaments, including Ayurvedic, Unani, Siddha, Homeopathic or Bio-chemic systems also. Medicaments, in general, attract six percent central excise duty and five percent VAT. Further, CST, octroi, entry tax, etc. are also applicable in general. At these rates, the present total tax incidence works out to more than 13 percent.As against this, the proposed GST rate on medicines, including ayurvedic medicines, is 12 percent. Similarly, Medical devices, including surgical instruments, in general attract six percent central excise duty and five percent VAT. Along with CST, octroi, entry tax, etc., the present total tax incidence on them works out to more than 13 percent. As against this, the proposed rate under GST is 12 percent.

            Given the current rate on medical devices, which is VAT plus service tax plus octroi (in some locations), the GST on most medical devices shall fall at 12 per cent bar, which will be about 1.5 per cent less than current rates, Baid said.Industry will be encouraged by this to achieve lower costs of manufacturing and the advantages of cost reduction are likely to get passed on to consumers, he added.

Commenting in the same vein, Wockhardt Hospitals President Anupam Verma said: "The healthcare Industry would profit from the GST implementation as it would diminish the complexities and various obstacles to the growth of business".Healthcare sector is on the way of expanded profitability and promising development, he added.          

       Maximum Retail Price (MRP) on medicines is inclusive of all taxes, and present prices have been decided on the existing tax regime. Under GST, prices will need go up, but not on existing stocks. “The Centre, last week issued a circular (with a formula) allowing us to increase the MRP by 2.5% from July 1, under GST . On the existing stock, the manufacturers will get input benefit on scheduled drugs, but will have to bear losses on non-scheduled medicines.Despite this, manufacturers will see a loss of 2.5% on existing stock,” Indian Pharmaceutical Association president (industrial division) Subhash B Rijhwani . Owing to the expected losses stocks in retail stores in Bangalore have gone down by 50% . The stores which used to keep a 40-day stock have cut down the period to 20 the report adds. Similar fear appears to be present with chemists across the country.

           So due to GST stocks of medicines will be less stocked than in Medical shops and stockist till drug retailers are clear about this newly introduced GST BILL.



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