Two months after GST rate cut, consumers still overcharged by Ayurveda & cosmetics manufacturers

More than two and half months have passed since GST Council has reduced GST rates of unbranded ayurvedic medicines and cosmetic products having medicinal benefits from 12% to 5% and 28% to 18%, the manufacturers of ayurvedic products and cosmetics are still overcharging consumers.

Though some of the Ayurveda manufacturers have slashed MRP of their products but the product price has not come down in proportion to decline in GST rate. A difference of 3% to 4% in the MRP on those ayurvedic formulations where GST has been dropped by 7% from the 12% has been observed.

In cosmetics, again the MRP is even unchanged or reduced by 5% at the most while the GST rate has declined to 18% from 28%.

For instance, Himalaya Drug Company, one of the leading manufacturers of Ayurveda and cosmetic products has lowered MRP of certain Ayurveda products such as Neem, Amalaki, Tulsi Syrup, Shatvari Syrup, Arjuna by 3-4% which is not in proportion to cut in GST rate (7%).

Similar anomalies have been noticed in the company’s cosmetic products where the GST has been reduced by 10% (previously 28%) after the amendment. The firm has not reduced the MRP of Hairzone despite decline in GST rate from 28% to 18%. On the other hand, the MRP of Himalaya’s Clarina Facewash has declined by just 5%.

No changes have been observed while dealing similar products (Cosmetic Products) of Zydus Healthcare Limited, Hegde and Hegde Pharmaceutica LLP etc.

Joydeep Sarkar, general secretary of All India Chemists and Distributors Federation (AICDF) said, “In the last few months we have observed the consumers as the worst sufferers since they remained deprived of getting minimum advantages of the GST rate cut. Though the reduction in MRP has been noticed after the alleged manufacturer enjoyed the immediate first week after the modification of GST tax regime, yet the amendments of MRP which they effected is not proportionate.”

The initial complaints against the alleged manufacturers, so published at Pharmabiz.com, compelled them to reduce their MRP. We find no proportionate reduction despite GST percentages on ayurvedic proprietary medicines and cosmetics have already declined by 7% to 10% from the pre-November regime of 12% and 28%, said Sarkar.

Manufacturers were always in the good books of NPPA, the price monitoring authority.  It is an irony that every year the maximum recovery of overcharging amount on medicines is only 12% to 15% at most of the total alleged amount. AICDF believes in such ‘favouritism’ of the concerned authority is the impetus for the manufacturers which encouraged them to maintain old, unchanged MRP even after stricture of the GST Council.

AICDF has urged National Anti-Profiteering Authority to take action against the manufacturers of Ayurveda products and cosmetics for overcharging consumers despite reduction in GST rates.

GST Council had reduced GST rates of almost 177 products at a meeting held in Guwahati, Assam on November 10, 2017. Of which, unbranded ayurvedic medicine rates have been slashed from 12% to 5% and rates of diabetic food, medicinal grade oxygen, skincare products and certain cosmetic products used as essential medicines mostly at the derma, gynae segments have decreased from 28% to 18% with a directive to get implemented immediately.

Source:http://www.pharmabiz.com/NewsDetails.aspx?aid=106919&sid=1

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