GST Might Cause a Shortage On Medication

From July, the Goods and Service Tax (GST,) will be effective and Telangana chemists have advised customers to stack up on medication. This warning was given after a report came in that there will be a shortage of medication for a short period of time.

People in the state depending on a regular prescription of medication must buy their medicines in advance to avoid being stuck in the middle of the shortage said the Telangana Chemists and Druggists Association (TCDA.)

President of TCDA, S. Venkatapathi said, “There will not be a severe shortage, but we are expecting that the GST can affect the demand and supply.”

There are still a lot of uncertainties about the transition to GST, even what the final tax rate would be, which is currently taxed at 5%. Due to this, medicine dealers have decided to reduce their stocks for the month of July till their uncertainties are cleared.

Venkatapathi also reported, “There is a high possibility that tax payouts and tax refunds might not match and we might face close to 7% loss after the implementation of GST from July 1.”

The dealers are planning to reduce their stock to 15 days, rather than the 40 days that they usually maintain.

He further added, “The dealers are afraid of what will happen, we don not know. So we are not taking any risk. They had earlier also suffered losses due to delays in tax funds when the value added tax (VAT) was implemented. Once the rules are clarified, the situation will be fine.”

“People are advised to stock up on antibiotics mostly,” Venkatapathi said.

Venkatapathi has also said that there is still no clarity on what will happen to the medicines nearing their expiry date in the transition of GST.

The chemist from Apollo Medical Store in Begumpet said, “The owner has told us that there might be a shortage of medicines in the coming month. So we have sent messages to customers warning about the shortage and asking them to buy medicines in advance. There can be a shortage in supply of certain kinds of medicines.”