New Delhi, Sep 13 The Association of Indian Medical Device Industry (AiMeD) on Saturday welcomed the timely directions issued by the Department of Pharmaceuticals (DoP), National Pharmaceutical Pricing Authority (NPPA) and the Central Drugs Standard Control Organisation (CDSCO) to ensure smooth implementation of the revised GST rates on drugs, formulations, and medical devices, effective from September 22.
The Office Memorandum issued by DoP-NPPA on Friday clarified that while manufacturers and marketers are required to revise Maximum Retail Prices (MRPs) to reflect reduced GST, recalling or re-labelling of existing stock already released in the market will not be mandatory, provided price compliance is ensured at the retailer level.
CDSCO has further permitted the use of stickering on medical devices (Class C and D) within three months to reflect revised MRPs, thereby easing operational challenges for importers and manufacturers.
“This is a timely and pragmatic step by the government that addresses an important operational challenge faced by retailers, manufacturers, importers, and distributors whenever GST rates are revised,” said Rajiv Nath, Forum Coordinator, AiMeD.
“The provision ensures compliance, consumer transparency, and prevents wastage of packaging material while also safeguarding the industry against undue stock losses. We appreciate that the government has struck the right balance between protecting consumer interests and supporting industry ease of doing business,” Nath added.
While the NPPA communication does not specify penalties for non-compliance, it has the authority to monitor prices of drugs and medical devices and can take corrective action.
Non-compliance with NPPA's price notifications can lead to prosecution under the Essential Commodities Act, 1955, which may result in imprisonment and fines.
“The allowance to use existing packaging material by DoCA till December 31 is a cost-saving, very welcome measure that will benefit MSMEs and reduce unnecessary waste. We urge all industry members, as well as our channel partners and stakeholders, to strictly comply with the guidelines and issue prompt public notifications to ensure transparency and consumer trust,” Nath said.
He added, “await clarification for applicability for Class A and B medical devices as well as on pre-printed flexible packaging stocks with prior MRP for small packs of disposable medical devices like needles, where online over-printing may be a challenge.”
The decision on GST reforms of refund on GST paid on services and on capital expenditure, as is available in many countries globally, is also pending.
Nath said that this “reduction of prices is possible to be globally competitive, as the purpose of GST was to tax value addition at each step of the supply chain and not cause working capital stress to manufacturers or traders.”
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