Mysuru: “Dear customers, as the Central Government is implementing GST from today midnight, we are not able to provide you discounts on medicines. Please co-operate.”

Almost all the 400-odd medical stores in the city sported this board near their counters and at prominent places yesterday to make customers aware of the impact of Goods and Services Tax (GST) that was rolled out by the Narendra Modi Government from the Central Hall of the Parliament.

Consequent to the roll-out of the GST, chemists and druggists in Mysuru decided to withdraw the 7% to 12% discount against the total purchase amount.

According to drug sellers, it was decided by their association in view of the roll-out of the GST and the difference in tax amount that the retailers have to bear while there was no change in their profit margins.

Raghavan of Raghulal and Co., said that earlier they had to pay a Value Added Tax (VAT) of 5.5% on medicines, but under the GST regime the effective tax is 12% and the retailers have to bear an additional 7% increase in tax. Hence the discount on medicines has been withdrawn.

“Most wholesale dealers have stock to last for at least two months. We have purchased the present stock of medicines under the previous tax regime with 5.5% VAT. But with GST billing to commence from July 1, the difference in tax has to be borne by retailers on the existing stock and they are bound to incur a loss until the current stock is exhausted. The discount is being withdrawn to offset the loss,” he said.

Medical shop owners expect the prices to stabilise once the old stocks are exhausted. “As of now, we have withdrawn the discounts as there is no clarity on pricing of medicines. This will resolve once the existing inventory is sold and new stock is purchased under the GST regime,” a shop owner said.