Pharmaceutical is one of the biggest industry in India. A PCD pharma franchise company can benefit from the growing market as it will be able to explore new business opportunities. However, every business that earns profit will go through taxation.
GST is a result of a change in the indirect taxation system. Like all other businesses, it has also impacted the pharmaceuticals. In this article, we will try to under how GST has impacted the PCD pharma franchise company and the overall industry.
Understanding the impact
When the Indian government levied GST on the PCD pharma company product list, there was some initial chaos and confusion. This was due to the complex nature of the business.
After GST was levied, pharma companies could no longer enjoy area-based freedom. It resulted in the price increase of medicines for the end consumers.
However, there is a tax slab and the PCD pharma companies in India would attract the tax depending on the medicines they manufacture.
- The GST is nil for human blood, contraceptives, etc.
- It is 5% for life-saving drugs like tuberculosis, AIDS, diabetes, vaccines, etc.
- Ayurvedic, homoeopathy medications, etc., attract a GST of 12%
- Whereas, 18% GST is levied on nicotine gums and other specific medications.
However, it is to be noted that healthcare services including hospitalization are exclusive of GST. This means no additional tax is added to your hospital bills.
Impact on the medical franchise business
As a renowned PCD pharma franchise company, we know that GST has brought some confusion in the pharmaceutical business. Some companies are purchasing active pharmaceutical products to get IGST credit benefits while others are enjoying custom tax favours.
If you have a unit in the Special Economic Zone or SEZ, you are likely to face this more. This means if you are located in Himachal Pradesh or Uttarakhand, you will have special power in the Indian market due to the extract-free zone. However, you would also have to consider other things like transportation to understand the real benefits.
If you are thinking about consulting a PCD pharma franchise company, then contact us at Astemax Biotech. We have been an industry expert for a long and we can help you with opening a franchise as we have different plans available.
Positive & Negative Impacts of GST on the Pharma Industry
GST is a uniform taxation system which has made it easier for companies to operate and comply with the tax slabs. They can also easily claim tax credit which has helped to reduce the burden. Being transparent, it has helped to attract more investment to the pharma sector.
However, this taxation system has increased compliance costs and made it difficult for a PCD pharma franchise company to deal with unregulated businesses. It has also increased the prices of some medicines, making it less affordable for the end users.
Analyzing the pros and cons, this is the right time to start a pharma franchise business. If you are looking for a company that can assist you with this, contact us at Astemax Biotech.
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