Ayurvedic medicines to cost more despite reduced GST rates

Though the Centre has reduced the GST rate of unbranded ayurvedic medicines from 12 percent to 5 percent, the ayurvedic drug manufacturers say the price of the products would not come down.  According to the amended rates, five percent GST benefit will be available only if the labels in the products are free of manufacturers’ name, emblem or any colour. However, Ayurvedic Medicine Manufacturers Organisation of India general secretary Dr D Ramanathan said no product can be brought out in the market without the manufacturers’ name or emblem, which is a violation of  Drugs and Cosmetics Act. There was a possibility of levying a huge fine if these are not included, he said.

As per the new rates fixed, the drug will be considered as branded and 12 percent GST should be given if the products come with such things in the labels. When excise duty was imposed in 1994 for the drugs, products that came with company name and emblem were considered to be generic drugs.  95 percent of the drug manufacturing companies were not big ones and as such the new amendment in GST was not going to have any impact on the industry.

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