BackECONOMY
Pharmexcil says inverted duty hurts pharma MSMEs amid GST reforms
Pharmaceutical MSMEs in India face financial stress due to GST reforms after GST 2.0, according to Pharmexcil. The GST on finished formulations is 5%, with some lifesaving drugs exempt, potentially affecting manufacturing capacity, supply chains, imports, and employment.
Why It Matters
The GST structure could impact the viability of MSMEs in pharma, influencing medicine availability and employment in the sector.
Timeline
1 Event
Pharmexcil cites GST reforms harming pharma MSMEs
May 02, 2026
The Pharmaceuticals Export Promotion Council of India (Pharmexcil) says post GST 2.0 reforms have reduced GST on finished formulations to 5%, and that for some lifesaving drugs there is no GST. The body warns these changes have created disproportionate financial stress on MSME manufacturers and could lead to reduced manufacturing capacity, supply disruptions, higher imports, and employment instability.