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  • Writer's pictureThe team

Pre-GST prices for drugs as long as old stocks last

Distraught at having to deal with dual pricing and eager to spare customers a pocket pinch, although temporarily, chemists in Kolkata and the rest of the state have decided to stick to the existing price of medicines. While this comes as a huge relief for buyers — most drug prices are set to spiral under GST — retailers will absorb the higher tax, resulting in a minor drop in their profit margins. But most have already offset the loss by withdrawing the hefty discounts that would be offered to buyers till last month. Saddled with huge old stocks, retailers had been worried about their pricing and tax structure. But the confusion got cleared late on Thursday with manufacturers declaring that fresh stocks with a new MRP inclusive of GST will not be ready before October. Even though retailers and distributors are not yet aware of the post-GST tax structure, they heaved a sigh of relief. "A lot of ambiguity remains and we are not yet sure what the final tax structure is going to be. But the delay in the arrival of fresh stocks suits both retailers and buyers. While the former will not have to worry about their existing stocks or whether to sell new supplies at a different price, buyers will not have to pay more for at least two months," said Sadhan Ghosh, general secretary, Bengal Chemists' and Druggists' Association. But a section of buyers and retailers will still be losing a little. Even though the selling price remains unchanged, GST has already pushed up the tax component marginally. So, most retailers have withdrawn the discount they offered. Tarun Roy, a retailer-cum-distributor, explained: "At the moment, retailers would be absorbing the rise, sacrificing their margin a shade. So far, they enjoyed a 17%-18% margin which may go down by 1%-1.5%. But all of them have already withdrawn discounts which offsets the drop in margin for them." Around 85% of drugs have been put in the 12% tax bracket under GST. This is expected to result in a marginal price rise for most medicines. A large section of buyers now enjoy discounts from retailers which are often as high as 15%. It has been wiped out, affecting those who need to spend a substantial amount on drugs every month. Some are continuing with discounts but say they may be forced to withdraw it soon. Ramkrishna Pharmacy near Southern Avenue is among them. "Our margin has dropped but it is still too early to calculate the exact percentage. We are still offering a 10% discount to our customers, but may have to withdraw it soon to make up for the drop in our profit margin," said owner Ramkrishna Jana. Others called for a policy on discounts to ensure a level playing field. "Discounts should be uniform. At present, retailers offer them arbitrarily to lure customers. While it suits the big retailers, smaller outlets suffer," said Sanjay Majumdar, owner of The Pharmacy at New Alipore.

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