Impact of the Goods and Services Tax (GST) on the sector has largely been positive and constructive, he added.After the implementation of GST, the pharmaceutical sector grew 6 per cent to Rs 1.31 trillion on a year-on-year basis till May 31, Minister of State for Chemicals and Fertilisers Mansukh Mandaviya said Thursday.
"Before GST, annual turnover of the pharma sector (as on May 31, 2017) was Rs 1.14 trillion," Mandaviya said in a statement.
Elaborating on the reasons for the growth, he said that under the 'One Nation, One Tax' regime, the removal of the complexity of multiple taxes has reduced their cascading effect on the final product.
"GST is expected to decrease the manufacturing cost in view of merging of different taxes levied earlier and promote ease of doing business. It will create one single market for all stakeholders with equal chance towards development," Mandaviya said.
Pharmaceutical companies can now consolidate their warehouses at strategic locations, effecting a reduction in the cost of distribution. As a result, it will benefit the warehouse strategy and improve supply chain efficiency in the sector, he added.
There has also been a significant jump in the number of drug approvals after GST, Mandaviya said.