Even as the biggest tax reform Goods and Services Tax (GST) is to be unrolled in the country from July 1, the All India Chemists & Distributors Federation (AICDF) has proposed a three-pronged strategy to the National Pharmaceutical Pricing Authority (NPPA) for minimizing complications and loss of lakhs to pharmaceutical traders in the country.
In a memorandum to the NPPA, the AICDF General Secretary Joydeep Sarkar asked the government to continue with 5% GST on all medicines till September 2017 or next six months in a row from the date of implementation of GST. This will help the dealers, mostly the retailers, to minimize the loss and deficit and also to accustom with the process and policies of GST, since the existing VAT structure on medicine is 5% at most of the states in the country.
Another proposal is to allow 5% VAT/GST on all products having manufacturing date with May 2017 and also to dispose off the said inventory within the next 6 months or 180 days from the date of implementation with minimum formalities of declaration. The third proposal of the AICDF is to give credit for 100% of CGST instead of proposed 40% since traders have an average gross profit of 4% to 5% annually on their turnover.
In the memorandum, the AICDF stated that the AICDF is mostly concerned about the apprehended losses which the members may incur and/or absorb after the implementation of the GST. The AICDF has suggested these proposals to avoid all losses and simultaneously maintaining the inventory level normal in the pharmaceutical market in the country.
Regarding the GST preparedness and compliance of the pharmaceutical traders, the AICDF stated that migration processes for existing TIN numbers is continued. AICDF detected the processes is complicated and not flawless at the time of the allotment of respective ARN numbers and Provisional GST numbers. But the ‘Unregistered Dealers’ are in confusion since there is no official notice for fresh registration for occupying the desired GST numbers. Since VAT was applicable on MRP basis, in several states like West Bengal, Rajasthan the total number of unregistered dealers is almost 80% of the total drug licensees.
It is a fact that no comprehensible format of bill/invoice has been developed by any software as the concept and content of GST is not fully compact, it further stated.