NPPA directs Mfrs, Mkts Cos to pass on benefit of reduced GST to customers

GST on hand sanitizers, temperature checking equipment and electric furnaces used in crematoriums has been lowered to 5% from 18%.

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NPPA Price of drugs

Last Updated on June 19, 2021 by The Health Master

The National Pharmaceutical Pricing Authority (NPPA) has directed all manufacturers and marketing companies of drugs, formulations and medical devices to reduce prices of products already in the market on which goods and services tax has been lowered, so as to ensure compliance and pass on the benefit to end consumers.

“All manufacturers and marketing companies are required to revise the maximum retail prices of drugs / formulations on which tax / GST rates have been reduced taking into effect the revised rates of Tax / GST,” the authority said.

Medicine Injection Vaccine
Picture: Pixabay

The change in tax or GST rates has an impact on the fixation of retail prices of items attracting the tax, therefore, any downward change in tax should be reflected in the price and tax benefit of reduction should be passed on to consumers, it added.

The Central Board of Indirect Taxes and Customs (CBIC) Tuesday notified reduction of GST on 18 C-19 related relief materials till September 30, after the GST Council approved the reductions. The rate changes will be applicable on stock already in the market.

The GST on Remdesivir injections, anti-coagulants, any drug recommended by ministry of health and welfare for C-19 treatment, medical grade oxygen, oxygen generators, pulse oximeters, ventilators, specified diagnostic kits and Bipap machines has been reduced to 5%, from earlier 12% or applicable rate.

GST on hand sanitizers, temperature checking equipment and electric furnaces used in crematoriums has been lowered to 5% from 18%. The GST on tax on ambulances has been lowered to 12% from 28%, while Tocilizumab and Amphotericin B have been completely exempted from GST.

“Recalling, relabelling or re-stickering on the label of container or pack of released stocks in the market prior to date of notifications is not mandatory, if manufacturers are able to ensure price compliance at the retailer level through issuance of a revised price list,” the authority directed.

Experts said that manufacturers have been made responsible to ensure that prices are reduced by every retailer with immediate effect irrespective of the old price tags, else manufacturers will be required to call back the entire stock and revise the new reduced price tags.

Retailers of unsold Amphotericin B & Tocilizumab which are used in the treatment of black fungus and C-19 will need to re-work a new price as the items has been exempted from tax and entire input tax credit on the same will be paid back to the department,” said Rajat Mohan, senior partner at AMRG Associates.

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