Pankaj Rawat
(GST Practitioner)
(55052 Points)
Replied 28 April 2018
Every medicine has an expiry date aftr which it is not fit for consumption. Pharma companies are mandatorily required to mention their expiry date.
This expiry date is known already but it may be after the time limit allowed to make the sales return in GST. Now Pharma Company will have to get those medicines back and also they need to destroy it. It will be a hardship on them First they don’t get any benefit of tax on the sales return. They also need to incur some cost in destroying the medicines. Also they need to reverse the credit taken by them on the goods so destroyed. They will no doubt pass on this burden to the consumer and it will make the medicines even expensive. In a developing country like India medicines shall be given special exemption but then we have such a harsh provision for pharma industry.
Resolution provided by cbec and its analysis
All these issues were raised by the Pharma association before the CBEC and they also get reply via letter 349/57/2017-GST dated 26/12/2017. Many issues of pharma industry are resolved via that letter.
Main points cleared in the letter are:
Return on expired/damaged goods from distributor to manufacturer will be treated as return of goods and not as a fresh supply.
A credit note may be issued at the time of return of expired medicines.
So plz give the reference of above mention , issued letter by CBEC to your company ask them to reverse the same
CAclubindia
