GST jitters: Chemists’ body says no reason to panic, most retailers likely to be unaffected

A majority of retailers in Pune fall under the composite scheme, where their annual turnover is less than Rs 75 lakh, and the maximum loss under the new tax structure will not be more than 1 per cent.

Written by ANURADHA MASCAREHNAS | Pune | Published: June 21, 2017 9:19 am
gst, gst news, india news, indian express news A temporary shortage of medicines is likely, say some anxious chemists.

Fearing some amount of financial loss with the introduction of the Goods and Service Tax (GST), chemists have not ruled out a temporary shortage of drugs in the market. The Chemists Association of Pune, which has 7,000 retailers under its aegis, admitted that they were not willing to keep stocks. “With just 10 days left before GST is introduced on July 1, we don’t have much time to update our own database and carry out coding of the products as per the new structure,” said Rohit Karpe of the Chemists Association of Pune.

Anil Belkar, secretary of the Western Maharashtra unit of the All India Organisation of Chemists and Druggists, said that there was no clarification about the closing stock of drugs while Vijay Changediya, secretary of the Chemists Association of Pune, said that various changes have to be made before the GST regime starts, including “upgrading the software”.

Under the complex tax regime of GST, chemists have to be careful about avoiding errors and penalties. Chemists are worried that they may suffer losses on account of a possible mismatch between tax payouts and tax refunds under the new GST structure, so they have decided to maintain a minimum inventory for the time being.

In particular, wholesalers have an issue with the closing stock of drugs and need clarification, said Karpe.

He admitted that stockists are maintaining a minimum inventory and a temporary shortage of drugs could be likely.

However, chemists pointed out that they have received letters from major pharmaceutical companies, which are willing to buy out the losses that retailers may face, in order to avoid shortage of medicines in the market. “We have received letters from several pharmaceutical companies to this effect,” said Prasanna Patil of the Chemists Association.

Even as several chemists brace for the new GST regime, retailers whose annual turnover is less than Rs 75 lakh will not be affected much by it. A majority of retailers in Pune fall under the composite scheme, where their annual turnover is less than Rs 75 lakh, and the maximum loss under the new tax structure will not be more than 1 per cent.

J S Shinde, president of the All India Organisation of Chemists and Druggists, assured that currently, there is no shortage of medicines. He explained that chemists and retailers, whose annual turnover was less than Rs 20 lakh, would be exempt from GST.

Chemists and retailers whose turnover was between Rs 20-75 lakh would have to pay approximately 1 per cent under the composite scheme.

However, retailers whose annual turnover is more than Rs 75 lakh would be affected; of the 7 lakh retailers across the country, 40 per cent will come under the new tax structure. Urging that there is no need to panic, Shinde said chemists and wholesalers should not believe in messages across social media sites that have been warning people about an impending “severe shortage”.

For all the latest India News, download Indian Express App

    Live Cricket Scores & Results