Pune: About 7,500 chemists in the district are forced to sit on Rs 50 crore worth of expired drugs after the implementation of the goods and services tax (
GST).
Earlier, the retailers used to return the expired goods under their challan to the wholesaler, who used to send them to the company. This process ensured that the retailers got an exemption, a sort of refund, on the next purchase to the tune of the value of the expired drugs that were returned.
However, the latest GST norms have completely barred this provision leaving retail chemists worried about the imminent loss.
"There is a huge stock of expired medicines lying with chemists in the Pune district. There are about 7,500 chemists in the district, including Pune city and Pimpri Chinchwad. Since there is no clarity about reimbursement of tax, the wholesalers are not accepting the stock from retailers as they cannot claim the reimbursement from the manufacturers," Jugalkishore Tapadiya, managing director Maharashtra Safe Chemists and Druggists' Association Limited, a company formed by 40,000 retail and wholesale chemists in the state.
Jagannath Shinde, president of All India Organization of Chemists and Druggists (AIOCD), said not all the chemists were affected. "Chemists with a turnover of less than Rs 20 lakh per year are exempted from paying GST. And those who are in the turnover bracket of Rs 20 lakh to Rs 75 lakh have to pay just 1% GST. And those chemists whose turnover is Rs 75 lakh and above have to pay 12% tax. These are the chemists who are mainly hit by the expired stock," Shinde said
There are a total of 72,000 chemists including retailers and wholesalers in Maharashtra. "Among them, almost 60% are either exempted or fall into composite (1%) GST, the remaining 40% chemists will have to pay 12% GST on medicines," he added.
"We have requested Union finance ministry to effect some amendment in the GST Act regarding drugs facing expiry," Shinde said.
Vidyadhar Jawadekar, joint commissioner (drugs), Food and Drugs Administration, said, "This is the tax-related issue and hence it does not come under our purview. As for the disposal of expired drugs, the responsibility lies with the manufacturing company and not with the wholesalers and retailers."
