GST roll out: Get prepared for shortage of medicines
It is advisable that you visit your medical store since the drug industry fears that there may be a short-supply of medicines from July 1. GST is set to roll out at midnight today and will be in effect from July 1 onwards.
The problem is that many stockists and retail chains especially in smaller towns and rural regions do not have a GST number yet. This is led to the anticipation that there may be shortage of medicines at least for the first couple of days.
The All India Organisation of Chemists has however assured the government that there would be no short supply of medicines. However the pharmaceutical industry says that there are at least 20,000 traders across the country who are yet to put in place systems to handle the GST rollout.
The reduction in inventory became visible from May end itself. Most distributors and retailers were trying to reduce losses due to a change in the tax structure. The inventory holding for medicines for diabetes, gastrointestinal diseases and cardiac ailments were lower than the average of 22 days. The retailers were seen telling customers to buy medicines for chronic diseases in advance in an attempt to offload their stock.
Once GST kicks in most medicines will be taxed at 12%, while essential drugs including insulin will be taxed at 5%.