GST supply crunch: Stockists paring drug inventories

Chemists say sufficient stocks are available, experts say shortage may be limited to few brands

A reduction in inventory ahead of the implementation of the goods and services tax (GST) on July 1 may result in a shortage of about 5-10 per cent drug brands at the retail level, pharmaceutical industry executives and experts Business Standard spoke to said.
 
Stockists are keeping inventories at a minimum level to reduce the impact of tax increases and to bring down complexities that will accompany changes in the tax regime. The current rate of tax on medicine works out to around nine per cent, while under GST most drugs will be taxed at 12 per cent.