GST Rate Cut To Reduce Medicine Prices, NPPA Issues Major Order To Pharma Companies
NPPA has ordered pharma companies to revise MRPs of medicines in line with GST rate cuts. Consumers will pay less, while companies can avoid mandatory relabeling or recalling of existing stock.
Consumers to get direct benefit as drug MRP must reflect lower tax. | Representational Photo
Mumbai: The National Pharmaceutical Pricing Authority (NPPA) has issued an order asking all drug manufacturers and marketing companies to revise the Maximum Retail Price (MRP) of medicines where GST rates have been reduced.
This step ensures that the tax cut benefits reach customers directly.
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Relabeling Not Mandatory
NPPA clarified that companies are not required to recall, relabel, or re-sticker existing unsold stock. Doing so is voluntary, provided certain conditions are followed.
However, whenever the government reduces GST or any other tax on medicines, the MRP must be cut proportionately.
Relief for Consumers
As per NPPA, companies can comply by issuing revised price lists to retailers and state regulators. This means consumers will spend less on medicines, and companies will avoid costly relabeling.
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Examples of Tax Cuts
Recent GST rate changes are expected to bring down medicine costs. For example:
- Some medicines’ GST reduced from 12 percent to 5 percent.
- Certain life-saving drugs brought down from 5 percent to zero percent.
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