GST notices to pharma firms on free supply to have wider ramifications

The notices sent by the directorate general also point out that the value of such free supplies has been realised from the ultimate consumer

Notices sent by the tax department to major pharma companies over not cutting the Goods and Services Tax (GST) on free supplies to retailers are likely to have repercussions on fast-moving consumer goods (FMCG) companies as well, warn tax experts, who found no ground for the notices.

The notices sent by the Directorate General of Goods and Services Tax Intelligence (DGGI) say that some free supplies of drugs - injections, tablets, syrups - have been made to stockists and retailers without charging GST on them.

Abhishek Rastogi, partner with Khaitan & Co said: “The issue of free supplies will have wider implications