GST: Chemists on 'clearance spree' create artificial scarcity of medicines?
- From July 1, all the medicines will have 18 per cent tax on it. Earlier, it was only 5.5 per cent tax
- Chemists adopting various ways to lure customers to clear their bulk stock fearing losses
- Pharmaceutical companies too are going slow on manufacturing as they are not ready to incur losses by recalling old stock
- With the GST, it is mandatory for the firms to have barcode on medicines
FollowAhead of the Goods and Services Tax (GST) implementation from July 1, medical shops in the city  are reportedly creating an artificial scarcity of medicines fearing losses from the next week.
With the GST tax on all medicines having gone up to 18 per cent from 5.5 per cent, the chemists in the city are not ready to stock up their shelves, until July 1, reports Vijaya Vani. On the other hand, they are on the clearance sale spree to save them from the possible losses from the existing stock. In fact, "Buy in bulk" are the common boards that greet the customers these days at the medical shops in the city. They are allegedly luring the customers to buy in bulk as the new GST tax will be make a hole in their pockets. Their targets are patients suffering from diabetes, asthma, Nephro problems and blood pressure as they need medicines, daily and they are being asked to buy in bulk. While a few customers are buying in large quantity - to save themselves from the GST burden - they, in turn, are helping the chemists too.
It is said that under the new tax regime from July 1, there would be mismatch of the tax payouts and tax refunds, hence the chemists have decided to maintain a minimum inventory at hand, reports Business Standard. Besides, lack of assurance from the pharmaceutical companies to refund the existing stock - after July 1 - is also preventing the chemists from buying the new stocks, it is said.
In fact, the pharmaceutical companies are not ready to incur the losses either by recalling the stocks or promising to refund on the old stock. For, GST makes it mandatory for them to have barcode on the medicines. With no clarity on it, the firms are slow at manufacturing the medicines, it is said.
The government authorities are trying to allay fears of both the manufacturers and chemists. But the uncertainty over the availability of medicines and the fear of new pricing from July 1 has left the customers in lurch, reports Vijayavani. Â
