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Pass on Covid drugs, medical oxygen GST cut benefit to consumers: NPPA to drug makers

Last week, the GST Council slashed tax rate on COVID-19 drugs such as Remdesivir and Tocilizumab as well as on medical oxygen and oxygen concentrators. 

Any downward change in GST rates should be reflected in MRP and the benefit of tax reduction should be passed on to consumers, NPPA said. Any downward change in GST rates should be reflected in MRP and the benefit of tax reduction should be passed on to consumers, NPPA said.

The National Pharmaceutical Pricing Authority (NPPA) has asked drug makers and medical device makers to reduce the prices of products on which the goods and services tax (GST) rate has been slashed to pass on the benefit to consumers.

In a notification, the drug pricing regulator said change in tax and GST rates has an impact on the fixation of maximum retail price (MRP) of items which attract these taxes.

Since MRP of drugs and formulations is inclusive of taxes and GST, any downward change in GST rates should be reflected in MRP and the benefit of tax reduction should be passed on to consumers, it said.

"In view of the above, all the manufacturers and marketing companies are required to revise the MRPs of drugs/formulations on which tax/GST rates have been reduced taking into effect the revised GST rates," the notification said.

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NPPA said recalling or re-labelling or re-stickering on the label of the container or pack of stocks released in the market prior to the date of notification is not mandatory if manufacturers can ensure price compliance at the retailer level through issuance of a revised price list.

Last week, the GST Council slashed tax rate on COVID-19 drugs such as Remdesivir and Tocilizumab as well as on medical oxygen and oxygen concentrators.

Acting on the recommendation of a group of ministers from different states, the Council cut GST rate on COVID-19 drug Tocilizumab and black fungus medicine Amphotericin B to nil from 5 per cent. Besides, hand sanitiser, pulse oximeter, BiPAP machine, testing kit, ambulance and temperature check equipment were among the 18 items on which GST rates were lowered.

On June 14, the finance ministry's revenue department notified the lower rates for 18 COVID-related supplies, like hand sanitiser, pulse oximeters, BiPAP machine, testing kits, ambulances and temperature check equipment. The concessional rates would be applicable till September 30, 2021.

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