The All India Organisation of Chemists & Druggists (AIOCD), which represents over 12.5 lakh chemists and distributors nationwide, has appealed to the government for immediate relief measures to support small retailers struggling with the ongoing shift to GST 2.0.
In a memorandum to Finance Minister Nirmala Sitharaman, AIOCD President J S Shinde and General Secretary flagged the growing distress among small traders after the recent reduction in GST rates on medicines. Under the new slabs, taxes were cut from 18% to 5%, 12% to 0%, and 12% to 5%. While the move benefits consumers, chemists said it has left them with steep losses on unsold inventory purchased at higher tax rates.
The association pointed out that a majority of small pharmacy retailers operate either outside GST registration or as composite dealers, making them ineligible for Input Tax Credit (ITC). With drug margins tightly regulated by the National Pharmaceutical Pricing Authority (NPPA), traders are unable to absorb the financial hit.
To ease the transition, AIOCD urged the government to:
- Permit sale of old stock at pre-revision MRPs for three months.
- Announce a special relief package for affected retailers.
- Refrain from penal action during the adjustment period.
AIOCD cautioned that without timely support, many small chemists - especially in rural and semi-urban regions may be forced to shut shop, jeopardising last-mile access to essential medicines.
Calling GST 2.0 a landmark reform, the association emphasised that its success must not come at the expense of small retailers who form the backbone of India's pharmaceutical distribution network.
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