Old stock blocks GST benefit

Hyderabad: The Union Government's much-delayed decision to slash the GST rates on drugs used for Covid treatment and other medical equipment did not give any relief to the corona patients undergoing treatment in the State.

It may be mentioned here that Union Finance Minister Nirmala Sitharaman had recently announced reducing the GST rates on the life-saving drugs - Remdesivir by 5 per cent from the present 12 per cent and other drugs like Tocilizumab, Amphotericin B etc used for treatment of black fungus has been exempted from the GST.

Earlier, the Centre was collecting 5 per cent GST on these drugs. The prices of drugs like Remdesivir, corona testing kits, including oxymeters and hand sanitisers and ambulance services remain the same. The reason cited by the pharma suppliers were that they will have to charge as per the earlier GST rates since they had purchased the stocks prior to the latest announcement and until these stocks get exhausted, they cannot pass on the benefit to the buyers.

The supplying agencies told The Hans India that anticipating huge demand for corona drugs, they had purchased huge stocks from the manufacturing companies and sold the same to the retail agencies which are selling the medicine at old GST rates. They are not ready to lose their profit margin.

The pharmacies in hospitals are also yet to reduce the prices.

They too have the same argument that unless the existing stocks get exhausted, they cannot do anything. The Drug Control Authority is unable to do anything and the sale of these drugs and equipment at old rates continues. The diagnostic centres, including those in corporate hospitals, said that they had stocked Covid test kits and unless it was exhausted, they would have to charge as per the old rates. There is also no change in GST collected on ambulances services.

Though here the issue of old stock and the new stock does not arise, lack of vigilance on the charges being collected by the ambulance services and electric crematoriums, people continue to get fleeced.

When contacted, the drug control authorities said they did not book cases against any drug selling agency for collecting old GST on drugs and medical services to date.