How GST is going to impact on Pharma Franchise Business
How GST is going to impact on Pharma Franchise Business – GST is one full shower starting from 1 July 2017. The Indian Pharma Industry is already giving negative and positive reviews. The Goods and Service Tax (GST) was a part of the 122nd Amendment Bill as a part of One Hundred and Twenty-Second Amendment Act, 2017 of the Indian Constitution. If you are franchise owner or thinking of becoming one then you must know how GST is going to impact on Pharma Franchise Business.
Pharma Franchise business in India has been a luring one. The advantages it provides helps the fresher and new self-made entrepreneurs to avail better business opportunities. Every profit running business goes through taxation. The change in indirect taxation system has resulted in GST. It is the new taxation system with single transaction equal to nine indirect taxes that were levied on the pharma industry. Lead by GST Council and Arun Jaitley, Union Finance Minister of India as its Chairman government of India has succeeded introducing GST. In this post, we will be discussing how GST is going to impact on Pharma Franchise Business.
What Is GST? | The Role Of Indian Pharma Industry
GST was kept pending for years and has now finally shaped the country. GST is an abbreviation of Goods and Service Tax. The Indirect taxation system consists of 13 taxes. These include Value Added Tax (VAT), Service Tax, Purchase Tax, Excise Duty etc of which only 8 are applicable It’s the pharma industry. GST is a simplified version of aborting the cascading effect and single transaction makes the tax. It is levied on consumption through manufacturing, sale, and purchase of goods and services at national level. One can experience GST in three forms:
- State GST (SGST) (State Govt.)
- Central GST (CGST) (Central Govt.)
- Integrated GST (IGST) (Central Government, Inter-State supply of goods and service)
The Pharma industry contributes 5% of India’s GDP when it comes to industries. The industry has been contributing a lot for the small-scale entrepreneurs around the nation. As per a report, the GST on pharma industry is said to attract taxes in a slab of nil, 5, 12, 18 and 28 percent. The Nil GST involves human blood and its component along with all types of contraceptives. Mostly the medicines fall under the category of 5% to 12%. Thus, the Pharma industry is facing mix response due to GST prevailing in the market.
What Is The Impact Of GST on Pharma Franchise Business?
GST has brought bit confusion in the industry with its introduction. The companies are purchasing active pharmaceutical ingredients (APIs) to get credit benefits under integrated goods and service tax (IGST) with some getting custom tax favors. Those who have manufacturing units in the special economic zone (SEZ) like Himachal Pradesh and Uttarakhand are likely to face more. As per a report, the life-saving drugs are said to come down to 2% as being essential for everyone. The disparity in economic divide may be the reason to make medicines available to even the poorest.
- Marketing tools, discounts schemes’ and free drugs samples etc will become costlier prior GST. This due to phases of the supply chain.
- MRP or trade value is uncertain till date. Those enjoying excise duty-free facilities may have to face losses and profits. With concessions removed and liable to pay a rate can make a huge difference. For e.g. we purchase medicines at Rs 25 from Baddi with 1.5 CST. Then further sold it at Rs 30 at 2% CST. The total tax we had to bear was 3.5%. With GST being above 5%, you will have to pay 5% instead of 3.5% which means a loss to the company. The Greater loss for those coming under the slab of 15% to 28%.
So if want to start a pharma franchise business after coming to GST then Arlak Biotech will be best options for you. Arlak biotech come in the list top pharma franchise companies. For more details information about GST & Pharma franchise plan call us at our toll-free number 1800-121-6263 or email atarlakbiotech@gmail.com
Conclusion:
GST’s main motive towards various industries especially Pharma industry is to provide the entire distribution chain transitions on time with GST. Filing taxes online is viable for all to make the industry more planned and organized. One can start a franchise business and it is the right to do so. There may be confusion by strategic plans can be laid out which will profit late. It’s only taxation structure and way of invoicing has changes and nothing else.
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