The Bangalore Districts Chemists and Druggists Association (BDC&DA) has now communicated to the Karnataka Commissioner of Commercial Taxes to allow sale of stock of June 30, 2017 on existing sale price till September 30, 2017. These would not only include medicines but other packaged commodities sold in retail chemist outlets.
The Association has also asked the commissioner to consider the composition scheme at Rs. 100 lakh from the current Rs. 75 lakh.
“We are upset that when a major tax reform like GST has been brought into force with an appointment of a Council, it has failed to consider or discuss stocks in trade, where prices are fixed according to norms,” said V Hari Krishnan, president, BDC&DA.
Medicine prices are fixed or arrived under provisions of Drug Price Control Order 2013 with a margin. It also includes price of packaging the commodities like infant foods, cosmetics, tooth paste, toothbrushes, diapers, toiletries and nutritional supplements to name a few which are fixed by the manufacturers and marketers in accordance with the taxes in force with a margin to the retailer.
National Pharmaceutical Pricing Authority (NPPA) has come out with a formula on the calculation of prices with the GST rates on June 30. The price list of the new rates has to be issued and circulated to the retail chemists to continue the sales to the consumer without considering the loss of margins. Now in the absence of this, there is a huge loss of margin to the retail chemist when he has been let down by the government and the manufacturer on his margins. This has resulted in huge financial losses.
The existing value added tax (VAT) paid by the chemist which will be compensated in the form of input claims with the state government also amounts him of capital loss where the retail chemist is unable to sustain the financial loss, he explained.
There is no clarity on the input claims of excise duty which has been included in the purchase price. This is also amounting to heavy financial damages unanswered by the government or the manufacturer or marketer.
In view of these, we request to consider to sell the stocks held by retail chemists held as on June 30 at the same price till September 30, 2017.
The retail chemist deals not only with medicines and also other goods coming into the fold of zero percent which covers the slabs of 5%, 12%, 18% and 28% to be shared as CGST and SGST. For this the small retailers need a computer, a format to tabulate along with the HSN code. In the absence of required infrastructure with the small chemist outlet, BDC&DA is requesting the Karnataka Commissioner of Commercial Taxes to allow sale of stock as held on June 30, 2017 on existing sale price till September 30, 2017, said Krishnan.