Bangalore District Druggists and Chemists Association (BDDCA) has intimated all pharma companies that they should now provide the minimum margin of 20 per cent to the retailer on MRP and 10 per cent to wholesaler on price to retailer (PTR) inclusive of excise duty.
This follows the National Pharmaceutical Pricing Authority (NPPA) clarification issued to the Association. It states “The IMS Data gives the price figure for retailer level prices. In order to arrive at ceiling price, the price to the retailer (PTR) will be further increased by 16 per cent as margin to the retailer. Therefore, the price to the retailer is inclusive of excise duty. Ceiling price is arrived by adding 16 per cent retailer margin to average PTR which includes excise duty. The manufacturer may add VAT or local taxes only if they have actually paid it or it is payable to the government on the ceiling price fixed by NPPA in respect of scheduled formulations under DPCO 2013 . As such there is no provision for wholesale margin and minimum grace period in DPCO 2013.”
Quoting the NPPA clarification regarding the wholesaler and retailer margin on PTR inclusive of other local taxes, V Hari Krishnan, president, Bangalore District Druggists and Chemists Association informed all pharmaceutical manufacturers that they would need to adhere to the above norms.
He also called for the issue of Credit Notes for the difference in margins on excise duty to companies which has provided the margins minus excise duty after the notification of the DPCO 2013.
“The companies should now immediately revert to the fresh trade price list and Form-V prices which is inclusive of margins,” said Krishnan.
“The NPPA has also clarified on the on payment of tax either VAT or local taxes only if manufacturers or marketers actually paid the same on the ceiling price. This is fixed by the NPPA because the taxes have to be paid to the respective States and Union Territories wherever the formulations are exhibited for sale,” he said.
“As far as Bangalore District Druggists and Chemists Association is concerned, we have already indicated to the Karnataka government and requested for necessary amendments for payment of taxes by pharma manufacturers or marketers on their stocks. In this regard, the State commissioner of commercial taxes has assured amendment will be made on the payment of taxes as per the provisions of the DPCO 2013”, said Krishnan.