NEW DELHI: The Centre has directed drug and medical device manufacturers to immediately revise maximum retail prices (MRPs) to reflect the reduction in Goods and Services Tax (GST) rates on formulations, effective September 22.
The decision follows recommendations made at the 56th meeting of the GST Council, which rationalised tax structures, including lowering GST rates on several essential drugs and formulations.
According to an office memorandum, manufacturers and marketing companies must ensure that the benefit of the tax cut is passed on to consumers from September 22. Companies have been asked to issue revised or supplementary price lists in Form V/VI to dealers, retailers, state drug controllers and the government, indicating the revised MRPs.
The memorandum further mandates that manufacturers take “immediate measures” to sensitise dealers, retailers and consumers about the revised rates through electronic, print and social media. Industry associations have also been urged to release advertisements in national and regional newspapers to ensure wide awareness and compliance.
To avoid disruption in supply, companies are not required to recall, re-label or re-sticker stocks already in the market before September 22, provided they can ensure price compliance at the retail level. However, firms opting to re-label or re-sticker may do so in a phased manner to prevent shortages.
The Central Drugs Standard Control Organisation (CDSCO) has already issued directions under Rule 104A of the Drugs and Cosmetics Rules, 1945, to facilitate smooth implementation of the revised pricing framework.