GST relief for Pharma sector? BIG update likely from GST Council

By: Admin
May 10, 2024
Categories: GST Recent News
4 Min Read

GST relief for Pharma sector: The Pharma sector is likely to get relief from Goods and Services Tax (GST) – ET NOW has reliably learnt. According to insiders, the GST Council is likely to correct the inverted duty structure issue being faced by pharma industry players.

According to sources, the Union Ministry of Chemicals and Fertilizers is expected to approach the Union Finance Ministry on the inverted duty structure issue. The move is expected to come after the Department of Pharmaceuticals held consultation with industry representatives, who suggested that the inverted duty structure needed the attention of the council.

GST relief for Pharma sector: What we know so far

The industry players also approached the ministry to end anomalies in GST on output products. According to the existing structure, 18 per cent GST is levied on input, while five per cent GST is applied on the final product in several cases. It is reliably learnt that the ministry may recommend 12 per cent GST on final products and five per cent on inputs.

The recommendations will be submitted to the Finance Ministry after the formation of the new government.

What is the inverted duty structure in GST?

An Inverted Tax Structure simply means a tax condition wherein the tax rate on input materials is higher than the tax rate on the output. In simple words, the tax imposed on the import of a particular ingredient could be higher than the export duty on the final finished product. For instance, the World Bank, in a recent book had observed that ‘the medical equipment industry in India faces duty inversion as materials for medical equipment face a tariff of 7.5 per cent while final goods face a tariff of five per cent’.

Source from: https://www.etnownews.com/markets/gst-relief-for-pharma-sector-big-update-likely-from-gst-council-article-109948745