Faster GST refunds a boon for pharma, medtech units

THE NEW SYSTEM under the Goods and Services Tax (GST) allowing 90% provisional refund to be released quickly in all low-risk cases has given a huge relief to the pharma and medtech sectors.

- MANU KAUSHIK

By amending rule 91(2) of CGST Rules, 2017, the government has made it easier for companies in these two sectors to get tax refunds without long delays. The industry players said that the move will ease the working capital constraints for both the sectors, thereby stimulating domestic manufacturing.

"Our inputs are taxed at 18% whereas the formulations have a GST rate of 5%. This leads to the accumulation of duties which affect the working capital, especially hurting the MSMEs. The new system will resolve the issue," said Viranchi Shah, spokesperson of Indian Drug Manufacturers Association (IDMA).