Mon Sep 01 15:15:57 UTC 2025: ## News Article Summary:

The Bangalore District Chemists and Druggists Association (BDCDA) is urging the Union Finance Minister to reform the Goods and Services Tax (GST) on pharmaceuticals. They propose a uniform 7% GST levied on the Maximum Retail Price (MRP) of all medicines. The BDCDA argues that the current system, based on discounted transaction values, encourages price manipulation, inflated MRPs, and unfair competition. They claim a uniform GST on MRP would promote transparency, fair trade, and ultimately benefit public health by forcing manufacturers to set realistic prices and curbing profiteering. They also state that the current GST system divides medicines into multiple slabs and that there is a need to abolish them to bring a uniform 7% GST on MRP on all medicines.

## News Article:

**Bangalore Chemists Call for GST Overhaul on Medicines, Citing Price Manipulation**

**Bengaluru, September 1, 2025:** The Bangalore District Chemists and Druggists Association (BDCDA) has penned a letter to Union Finance Minister Nirmala Sitharaman, advocating for significant reforms to the Goods and Services Tax (GST) structure applied to pharmaceuticals. The association is specifically proposing a uniform 7% GST to be levied directly on the Maximum Retail Price (MRP) of all medicines.

In their letter, the BDCDA argues that the current system, which taxes medicines based on discounted transaction values, is riddled with problems. They claim it creates opportunities for widespread price manipulation, with some retailers offering artificial discounts as high as 90%. This, they argue, misleads patients and deprives the national treasury of legitimate revenue. Ethical chemists are also placed at a disadvantage, struggling to compete with these unsustainable practices.

“The sanctity of MRP is reduced to a ‘Manipulated Retail Price’ under the current system,” the letter states. “A uniform 7% GST on printed MRP will eliminate this distortion, restore fairness, and simplify compliance.”

The BDCDA further highlights the issue of inflated MRPs on medicines not covered by the Drug Price Control Order. They claim manufacturers inflate prices by as much as 599% to maintain the illusion of significant discounts. Taxing discounted values effectively hides this profiteering, resulting in higher costs for patients and lower tax revenues for the government.

“By levying GST directly on MRP, manufacturers will be compelled to print realistic MRPs, dismantling the cycle of artificial inflation,” the letter explains.

The association believes the proposed change would also strengthen the pharmaceutical supply chain, curb the infiltration of counterfeit drugs, and ensure greater accountability in pricing. They pointed out that generics projected as low-cost medicines, often carry margins exceeding 1000%, with fake discounts masking profiteering and shrinking GST collections as taxes are applied on manipulated transaction values.

The BDCDA also addressed the current system dividing medicines into multiple GST slabs of 0%, 5%, 12%, and 18%, arguing that it complicates the matter and a uniform rate is preferrable. Therefore, they are requesting that the 12% slab be reduced to 7% on MRP of medicines and the 5% slab be increased to 7% on MRP of medicines. The ultimate goal, they say, is to ensure patients receive medicines through transparent and accountable trade practices.

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