The go-ahead on GST will smoothen operational hiccups for industry, but it is unlikely that medicine prices will see a perceptible dip, if at all, say pharmaceutical and healthcare experts still mapping the impact.

Most medicines and medical technology products are bucketed in the 5 or 12 percent bracket and they are unlikely to see an adverse impact, says Hitesh Sharma, consultant EY’s Partner and National Head (Life Sciences).

In the pre-GST regime, exempted products attracted VAT at about 5.5 - 6.5 per cent duty. And other pharma products attracted a total tax (including VAT) of 11.5 to 12.5 per cent.

A similar situation plays out with the raw materials or Active Pharmaceutical ingredients as well, he says. GST will, however, bring in benefits in terms of compliance, reduced corruption and greater operational smoothness, he agrees, as other cascading taxes across states like Octroi in Maharashtra get absorbed into it.

Clarity is still to be got on how GST will pan out on products from the tax-free zones and physician samples, he says.

Similar operational clarity is required on healthcare being exempt as well, he adds. Welcoming the move to a ‘one country, one tax’ regime, Kanchana TK, Director General with the Organisation of Pharmaceutical Producers of India (OPPI), says, “The research-based pharmaceutical industry was hopeful that there would be a reduction in the tax incidence on pharmaceutical product.”

Such a reduction would have helped in reducing medicine prices and impacted patients positively.

On the exemption to healthcare, Suneeta Reddy, Managing Director, Apollo Hospitals Group, observes that the move is a step towards universal health coverage.

Heading the Association of Indian Medical Device Industry , Rajiv Nath is concerned with the bracketing of diagnostics and reagents in the 18 per cent slab.

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