Sector-wise GST impact analysis

New regime kind on life savers, tough on sinners

Pharmaceuticals

• GST rates for specified life-saving drugs at five per cent, which is similar to the current regime

• GST rate is pegged at 12 per cent for other medicines, compared to the existing rate of eight-nine per cent

• Key raw material for manufacture of formulations (i.e. active pharmaceutical ingredients or API) could be at 18 per cent, thereby leading to inverted duty structure under GST

Automobiles 

• Indirect tax incidence on two-wheelers as well as small cars (<4 meters) to largely remain the same as present, with GST rate at 28 per cent.  Additionally, a cess of one per cent for small petrol cars (<1,200cc) and