India’s healthcare industry is worried that the implementation of the goods and services tax (GST) may lead to higher taxes that could erode its profits, even as it hopes that the new regime will help streamline the supply chain.
The nearly $10 billion pharmaceuticals industry is currently required to pay eight different types of tax at various stage of operation. “The biggest advantage to the industry would be that of reduction in transaction cost, with an immediate impact coming from the discontinuance of central sales tax (CST). The multistage taxation along with the inability to take the full benefit of the CENVAT (central value-added tax) credit/refund has been an issue for the industry,” Manish Panchal and Siddharth Paradkar of Tata Strategic Management Group said in a report. Analysts were sceptical, however, about the impact on the profitability of companies.