Pharma Firms Billing Under New GST Rates – The Pharma industry is still coping up with the waves of Goods and Services tax (GST) law. The retailing vendors like the chemist, pharmacists, chain pharmacies, etc have been facing confusion regarding GST bills. The Government of Indian introduced GST and HSN codes all pharma drugs and medicines. In this post, we are going to share our insights about the pharma firms billing under new GST rates.
GST enrolled on 1st July 2017. It has left the industries in a tense environment. The sales and purchase being made on GST rates are at the question. The companies and businesses won’t profit as they will not get the credit benefit of GST. The huge old stocks with old MRP is still left with retailers. GST has affected in nationwide confusion as to pharma firms billing under new GST rates.
Effect Of GST On Billing Of Old Stock
The GST act of taxation did not come as a shock for all. It was declared months before by the government of India. The taxation slabs and their fixation are yet to be argued. The pharma companies were yet to declare their new MRP rates for all medicines and drugs. This led to huge confusion between the retailer and pharmacy owner across the nation.
The old MRP rates were on hand. The prescribed medicines and products were left as huge stocks as on 1 July 2017. On June 28, an average turnover of 17 days stock was left with the distributors. This was sufficient to meet the demand for the time being as told by India Organization of Chemists and Druggists (AIOCD).
The old stocks were being sold on old MRP by many retailers who were mainly chemist shops. The Pharma Company is yet to send the latest revised rates of medicines, drugs and products. Some arguably sold the pharma items at old MRP due to consumer rights. This implies no products/ medicine could be sold above the MRP prescribed. Some have decided to show the old MRP but also make show GST rates differently.
GST Effect on Pharma Billing
The government of India has made registering on GST network important. The companies have to be GST compliant or else their payment will be affected. The subsequent vendors like retailers and pharmacies also get affected post-GST. They won’t get paid if they haven’t paid their credit (GST).
The vendors are suggested to do work through information technology systems. This saves their information online. It helps the government to directly supervise them. To meet the credit GST, many have started to sell their old stock on the written MRP and apply GST over it. Changes will be made according to the revised rates of medicines and products sent by the company.
HSN Code For GST
Harmonized System Nomenclature (HSN) is a code number that represents that class of a traded good or product. They have a common base for classification. It is universally accepted for commodity description and coding system as customs tariffs basis. The Chapter 30 of HSN code number tells about the pharma classes of drugs and medicines.
The government of India adopted it as a base for GST slabs of taxation. Each slab has a common descriptive base that divides into 5%, 12%, 18% and 28%. This is done to check the efficiency of the supply chain in the pharma industry.
The GST billing is in great hassle for some time till the old stock and new stock exists. The government of India has given them 6 months to finish the old stock. They have to show the transaction of old stock each month to the government.