New Delhi, Sep 6 (UNI) The recent decision by the Government to reduce the Goods and Services Tax (GST) on medicines from 12% to 5%, effective from September 22, 2025, has triggered significant financial concerns among pharmacies selling medicines across Delhi.
The Retail Distribution Chemist Alliance, Delhi, representing small and neighbourhood pharmacies, has expressed alarm over the immediate impact of the GST rate revision. Pharmacies claim they are grappling with the burden of accumulated GST input credits and unsold stock procured at the previous higher tax rate, resulting in considerable financial strain.
In a memorandum submitted to Delhi Chief Minister and Finance Minister Rekha Gupta, the RDCA, Delhi appealed for a transitional arrangement to mitigate the adverse effects on pharmacy businesses. There are over 22,000 pharmacies across the city.
They have requested a grace period of three months to deplete existing inventory purchased at the erstwhile GST rate. Moreover, the Alliance urged authorities to establish a clear and time-bound mechanism to adjust input tax credits within six months, thereby protecting small-scale pharmacy operators from incurring heavy losses.
“Such relief measures are imperative to ensure uninterrupted medicine supply and safeguard patient care across the city,” the memorandum stated.
Sandeep Nangia, President of the RDCA, Delhi elaborated on the key concerns that pharmacists have raised. He pointed out that the reduction in GST rate has led to a large accumulation of unutilised Input Tax Credit (ITC) on medicines stocked earlier, which pharmacies are currently unable to reconcile.
“Small pharmacies, which serve thousands of patients daily, lack the financial resilience to absorb these sudden mismatches, resulting in direct monetary losses,” Nangia said.
The financial stress risks may disrupt medicine availability at retail outlets at the cost of the patients.
The Alliance has now called for, immediate government clarification on mechanisms for adjusting or refunding excess ITC resulting from the GST rate revision. “We also want special transitional relief for pharmacies and distributors in Delhi to prevent disruption in the medicine supply chain.”
Also, there should be a consideration of a short-term compensation or adjustment scheme to ensure small pharmacies continue to operate sustainably without compromising patient care.
Nangia remarked, “While retail pharmacy stocks generally turn over quickly, the sudden GST rate change has left traders with unsold inventory burdened by unutilised input credits. This issue has been overlooked by policymakers.”
He added, “We too are consumers and stakeholders in the health ecosystem. The government must intervene with a practical solution to protect the interests of small traders and pharmacies, who have been left to bear the brunt of this tax shift.”
The RDCA, Delhi has urged the All India State Pharmacy Associations and the GST Council to take cognisance of the challenges and implement urgent remedial measures to support the pharmaceutical trade to help ensure the continued availability of medicines to the public.
