GST Effect: Medical Shops Create Artificial Shortage of Medicines in Karnataka

Bengaluru: Medical stores, pharmacies in Karnataka state reportedly spreading rumours that there is a scarcity of medicines, in an attempt to avoid possible loss which may arise after July 01 with the implementation of Goods and Service Tax in the country.

There is a 5.5% tax on medicines and the tax percentage will rise 18% once GST implemented in the state after July 01, 2017. A rise in the tax percentage is likely to reduce profit of the medical store owners as they brought the medicines at the tax rate of 5.5%.  In an attempt to reduce the possible loss after July 1, the drug sellers, medical store owners playing this kind of tactics, reports said. The concerned tax officials earlier assured medical stores that necessary steps would be taken asking medicine manufacturers to fill up the loss. However, medical stores have created fake news on shortage of supply of medicines to force the patients including BP, diabetes, heart and others to purchase them at large quantities as they require such medicines on daily basis.

Meanwhile, some of the medicine manufacturers have stopped the supply of medicines following works related to change of barcode and others in the wake of implementation of GST. Demand for medicines has declined significantly from medical shops, druggists in the last two months to avoid possible loss after July 2.