For most pharmacies and their distributors in Mumbai, nothing has changed post July 1. At least for now.
Many of them, if not all, are carrying stock from before July 1. This stock is labelled with pre-GST prices and hence pharmacists say they have no choice but to sell at old prices as they await new stock labelled with the adjusted pricing from manufacturers. It may take at least seven to ten days for the new stock to come in, they add.
Sales have been slow for the past week and this will continue. We will only know the new prices once the fresh batch arrives.Dilip Mahuvakar, Owner Dilip Surgicals
Most pharmacists, are however, confident that the prices for a lot of products will remain within the earlier range. “With the extra burden of octroi and other state levies gone, there will be scope for unrestricted trade and simpler taxation,” says Shyam of Avishkar Medical Equipment at Mumbai's Princess Street.
Archit Gupta, founder and chief executive officer of ClearTax agrees that the pharmaceutical industry will not see any major pricing changes on account of the Goods and Services Tax.
Also Read: NPPA Revises Price Caps Of 814 Drugs To Sync With GST
The bigger worry for traders is that input tax credit on the opening stock will come in with a lag. “We have already paid VAT on the opening stock and now we will pay GST again and claim the input later, that will reduce our margins at least by 20-30 percent,” according to Sunit Rathod of Reliable Chemists.
Besides, working capital requirements will now increase as GST must be paid monthly whereas money comes from buyers within 90 days, says PK Gupta, chairman of Confederation of Indian Pharmaceutical Industry.
Also Read: The Two Big Challenges Post GST Implementation, According To Arvind Subramanian
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