Mumbai: The Goods and Services Tax (GST) may not result in substantial savings for consumers on their medical bills with medicines falling under the 18% tax slab. But the pharmaceuticals industry will gain with streamlining of compliance framework, supply chain savings and operational efficiency. At present, the effective rate of taxation on drugs is 11-12%, so "the impact will be neutral", Hitesh Sharma, tax partner and leader life sciences, EY India, told TOI.
With GST rates of 5% for a handful of identified life-saving drugs, and 12% for overall medicines, the announcement is on expected lines. Annaswamy Vaidheesh, VP, South Asia, and MD, GlaxoSmithKline Pharmaceuticals, said, "It would not lead to increase in prices of medicines." Regarding certain life-saving drugs for different kinds of cancers, severe rheumatoid arthritis and epilepsy, imported at 0%, MNCs have sought a clarification on whether those would undergo a change in rate with GST implementation, an industry expert said.
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