Know about Revision of MRP of medicines due to GST rate cut

The Department of Pharmaceuticals (DoP) has directed all the manufacturers and marketing companies to revise the utmost retail price (MRP) of medicine or formulations on which Goods and Services Tax (GST) has been reduced taking into effect the revised rates of GST.

Drugs Controller General India (DCGI) and State Drug Controllers (SDCs) have also been apprised about an equivalent and directed to enforce the compliance on an equivalent .

Recalling or re-labelling or re-stickering on the label of container or pack of released stocks within the market before date of notifications, isn’t mandatory, if manufacturers are ready to ensure price compliance at the retailer level through issuance of a revised list , as per an Office Order from DoP.

The move comes within the wake of queries from a number of the manufacturers and marketing companies regarding implementation of MRP on the drugs thanks to change within the Tax/GST rates.

As per the DoP order, “In this regard, reference is invited to the O.M. No. 25(5)/2014/Div-V/NPPA dated April 13, 2016 issued by the National Pharmaceutical Pricing Authority (NPPA) which contains detailed guidelines for compliance of revised prices by manufacturers or marketing companies. The change in Tax/GST rates has an impression on the fixation of MRP of things attracting Tax/GST. As per Drugs control Order (DPCO) – 2013 MRP of drugs/formulations is inclusive of Taxes/GST. Therefore, any downward change in Tax/GST rates should be reflected in MRP and advantage of Tax/GST reduction should be passed on to consumers.”

The GST Council recently waived tax rates on black fungus amphotericin and reduced rates on several other Covid-related drugs, ventilators, testing kits et al. . These revised rates are valid till September end as against the sooner August end.

GST on black fungus drug amphotericin B has been slashed to nil from 5 per cent along side tocilizumab. The Council decided to travel ahead with the recommendations made by the Group of Ministers (GoM) within the ir report back to bring down the rates in the wake of the spread of the deadly black fungus.

India has reported over 28,200 cases of the deadly mycosis referred to as mucormycosis during a growing epidemic of the disease. From 28 states, 28,252 cases of mucormycosis are reported. Of these, 86%, or 24,370 cases, have a history of Covid-19 and 62.3%, or 17,601, have a history of diabetes. The difficult to treat condition is additionally facing the challenging of drug cost.

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