What Will be The Impact of GST on Healthcare and Pharma Sector

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    What will be the impact of GST on Healthcare and Pharma Sector?- GST has created a sensation in the business sector since its news broke out in the in the country. There are huge industries that will be affected by this new law by the government and among them is the Healthcare and Pharma Sector. Pharmaceutical industry contributes well to the GDP of the country not only this, the pharmaceutical sector is huge at the global level. Though the healthcare and Pharma, professionals are still analyzing what will be the impact of GST on pharma sector and healthcare Industry. It won’t be easy mapping the exact impact at this initial stage.

    Since the independence of the country, GST (Goods and services Tax) is government’s one of the major indirect tax reform major step. For the Pharmaceutical industry, which just blooms up to $70 Billion from 2012, it will be a game changer. Earlier with 17 federal and state taxes, this sector will be replaced with one uniform tax. On the brighter side of this bill, it has just simplified the entire process of paying tax.  According to the expert’s impact of GST on Healthcare and Pharma Sector has both pros and cons in the industry.

    What will be Impact of GST on Pharma sector & healthcare industry

    What is GST  (Goods and Services Tax)?

    One hundred and twenty-second amendment in the constitution in the Constitution of India is the Goods and service text bill which will be implemented by the 1st July 2017 all over the country. This bill will replace all indirect taxes levied on goods and services by the Indian Central and state governments. It is a VAT (value added tax) which will comprehensive indirect tax levy on manufacture, sale, and consumption of goods as well as services at the national level.

    How will the introduction of GST affect the Pharmaceutical and Healthcare Industry?

    The introduction of GST has come as a game changer for the pharmaceutical sector. Every pharma professional have their own views on this. Some claim that it’s a win-win situation for the government while some are doubtful about it. But one thing is very sure; it has made it much easier for the taxpayer by making a uniform way of paying a tax.

    Now companies are not requiring paying 8 types of different taxes but just one to the government. Since the expenditure on the healthcare sector is huge thus, it provides good review. The pharmaceutical and healthcare sectors are huge the GST will minimize the cascading effects of manifold taxes that is applied to one product.

    Effects of GST on the Pharma and Healthcare sector

    The GST will definitely affect the supply chain of every industry. Tax neutralization will take place between the dealers of the inter-state transaction. It will replace the traditional C&F model of distribution. Now the number needs to increase their dependency on the regional hubs rather on the multiple states. GST tax will definitely reduce the SCM cost and eliminate the complexity of the paying tax.

    Here, mentioned below are the advantages of GST that will help the pharma and healthcare sector:

    • Many believe that the implementation of GST will make the while processes of doing business much simpler than the earlier. It will minimize the cascading impact on the manifold taxes thus, the particular products will be much affordable for the buyers.
    • The tax structure of the pharmaceutical and healthcare sector will become much simpler and easy. Now, the companies will be able to ditch the 8 different processes of paying taxes by just paying for one single tax. Pharma industry is taking this as a good point for the sector.
    • The withdrawal of CST due to the introduction of GST in the country is a big relief for the pharma companies. It will reduce the overall cost of the transaction for the manufacturer which means that the cost of manufacturing will be low and simultaneously the cost of the products will also reduce.
    • The supply change of the pharmaceutical industry which is 2 percent the pharma industry will be rationalized which is again a breath of relief of the industry.

    How will GST help Industry to Grow? | Postive Impact of GST on Pharma Sector

    It may be too soon the analyze the impact if GST on the pharma and healthcare industry but few things will definitely going to change. The healthcare services, life-saving drugs, and medical devices will be tax-free which will make medical treatment for the people affordable. The portions like bonus schemes, free drug samples and the inter-state movement of the expired products or the stock transfers are some of the parts on which the impact of GST  is still not being analyzed.


    GST is government’s major step towards improving the economy of the country and managing the entire system of paying tax. Biophar Lifesciences hopes with this post you will be able to understand the impact of GST on the healthcare and pharma sector.

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