GST fear: Drug-makers expect shortage of medicines

NEW DELHI: With just a day to go before the roll out of goods and services tax (GST) in India from July 1, the country's drug industry fears that there may be a temporary shortage of medicines as many traders and chemists are yet to comply with the norms.

Though the All India Organisation of Chemists and Druggists, which represents over 8 lakh chemists, has assured the government that supply of drugs will remain uninterrupted, pharmaceutical industry executives say over 20,000 traders across the country are yet to get systems in place to handle GST roll out.

“Many stockists and retail chains, especially those in small and rural regions, do not even have a GST number in place. We are anticipating some shortages and problems at least for first few months before things settle down,“ a senior industry executive with a leading pharma company said.

Companies and retailers maintain that they are trying to coordinate as much as possible to avoid any disruptions in supply .

There has been a reduction in inventories since May-end, as distributors and retailers tried to minimise losses due to change in tax structure, sources said.

Inventory holding days for medicines for diabetes, gastrointestinal diseases and cardiac ailments were lower than the average of 22 days. However, retailers had encouraged consumers to buy medicines for such chronic diseases in advance in a bid to offload their stock.

Under the GST regime, most medicines will be taxed at 12%, while essential drugs including insulin will be taxed at 5%. The National Pharmaceutical Pricing Authority has issued a revised price list for medicines which are under price control.