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In order to ensure the cuts in GST rates of essential Covid-19 drugs and other medications is passed on to consumers, the National Pharmaceutical Pricing Authority has directed all pharma manufacturing and marketing companies to revise the maximum retail price (MRP) on drugs and formulations immediately taking into effect the reduced tax rate.

The move from the pharma pricing regulator is expected to ensure that the tax cuts benefits consumers by way of low cost of drugs and medications in the current difficult period of the pandemic.

The office memorandum issued by NPPA said that the change in GST rate has an impact on fixation of MRP of items attracting tax. As the MRP of drugs and formulations is inclusive of tax, therefore, any downward change in tax/GST rates should be reflected in MRP and the befit of this reduction should be passed on to the consumers, it said.

The authority has, however, said that recalling or relabelling or test ticketing on the label of the container or pack of relaxed sticks on the market prior to the date of notifications, is not mandatory, if manufacturers are able to ensure price compliance at the retailer level, through issuance of a revised price list.

The NPPA directions followed queries raised by manufacturers and marketing companies regarding implementation of MRP on drugs.