PCD Pharma companies V/S Pharma companies

PCD Pharma  companies  V/s  Pharma companies

To know the difference between importance of PCD  Pharma companies and Pharma companies, we need to know what exactly they are.

PCD Pharma Companies :

PCD Pharma Companies in India which are totally into marketing, works on marketing area of Pharma products only. They are a overall package to Pharma distributors who wants to expand his business without limits. Such companies choose the best manufacturers of Pharma products and get their own brands manufactured. Their focus is to provide every support to Pharma distributors who wants to work on their brands. This support includes high quality products at competitive rates, great packaging, safe and timely dispatch, promotional aids including LBLs, Catch covers, gift articles, Reminder cards, MR bags, Visual Aids, Presciption pads etc. Pharma distributors need not to worry about products and help from marketing company, they just need to work in their area by hiring MRs to contact to doctors.

PCD Pharma company in India

High quality Products :

PCD Pharma companies in India invest not only in good quality products, but variety of products also matters a lot. Pharma distributors need all segments of products while Pharma companies manufacturing single or maximum two segments, so cannot fulfil their requirement.

Availability of products on all times:

PCD Pharma companies take care of availability of products and invest a big amount in stock management. New  product demands of market is also well taken care of.

Packaging :

These companies also work on excellent packaging which attracts the customer and doctor as well.

Safe delivery of goods:

Safe delivery of Pharma products is also very important and it is done by choosing good delivery partners.

Promotional Support:

PCD Pharma companies give the support to its distributors. They get MR bags, LBLs, Visual Aid, gifts for doctors, Reminder cum Thank You Card etc. to promote the business.

Pharma Companies :

Pharma companies are especially manufacturers of Pharma products. They focus on manufacturing only. To provide the best quality products is the area they work for. Marketing and Manufacturing are two different fields. It can be done , but for perfection not all Pharma companies ( except the Pharma Giants through Ethical marketing) go for marketing. These companies manufacture for marketing companies as they are their customers. Pharma franchise companies order full batches or more than that to Pharma companies, so Pharma companies work on volumes. Pharma companies concentrate on one or two dosage forms. Some make tablets and capsules, some make syrups, some make ointments and so on. Not a single Pharma company can make all dosage forms. Unlike marketing companies, they need not to bother so many areas. They manufacture good quality products, so these companies have a special place for quality control team.

So, if we analyse, we find that work area of PCD Pharma franchise companies in India and Pharma companies is totally different.

 

 

Impact of GST on PCD Pharma companies

Impact of GST on PCD Pharma Companies

What is GST?

GST (Goods and Services Tax) is unified tax system which has come into effect from 1st of July. Most of the indirect taxes like sales tax, VAT, Excise, Octroi, Entertainment tax, custom duty etc have been subsumed in GST. It is said to be the single biggest economic reform since India got Independence. It is being said that it would help most of the sectors and make the taxation process easier as it will succeed a number of different taxes and duties, make the tax compliance smoother and easier and will make the whole of India as one market. It is also being said that the absorbing of these taxes into one uniform tax will facilitate the way of doing business in the country.Through this article we will explore the impact of GST on Pharmaceutical industry in brief and  Imapct of GST on PCD Pharma Companies in more details:

Impact on Pharmaceutical Industry:

It is anticipated that GST would have a positive  effect on the Healthcare Industry particularly the Pharma sector. It would help Pharma Industry taxation system since many different types of taxes were applicable on the Pharmaceutical Industry. GST will curtail the negative effects of taxes that is applied to one product. GST would also improve the operational efficiency by rationalising the supply chain that increases the expenses of Pharmaceutical industry. Moreover, GST implementation would also enable a flow of continuous tax credit, improvement the overall compliance create an equal level playing field for the Pharmaceutical companies in the country. One more benefit likely to follow due to GST is the reduction in the overall cost of  technology. Currently, the technical machinery and equipment which are imported into the country by the healthcare sector are very costly. Also, the duty which was levied was not allowed as a tax credit under the pre-GST tax regulations. However, with GST this scenario has changed. Under GST, duty charged on the import of such equipment and machinery would be allowed as a credit.

Impact of GST on PCD Pharma Companies :

You will see that in short term, GST may be a pain because of its implementation. In medium term, it will become neutral but in long term, it will play a very positive role for  Pharma Franchise companies in India (as well as on the overall Pharmaceutical Industry).

GST effects on PCD Pharma companies

Impact on prices (MRP) of medicines after GST:

On most of the medicines, the tax slab is 12% under GST, which is higher than the earlier applicable CST of 2-5 %. Will that lead to increase in process of medicines? NO.  Besides CST, the following taxes were applicable.

1. Excise Duty (Manufacturing stage)

2. VAT

3. Octroi

These taxes impacted that prices of medicines. Now these are being replaced by only GST with added benefits of input tax credit on purchases, expenses and reduced logistic costs. So, GST will not have any major impact on the prices of the medicines. So  no negative impact on PCD Pharma companies in India.

Impact on Trade Prices medicines after GST:

The same logic as given above is applicable on trade process as well. The PCD franchisee need not pay VAT also (applicable on MRP in some cases) which was from varying from 5 to 7% in different states. Besides this the franchisee will have the following added advantages in GST are :

1. Input tax credit on purchase

2. Input tax credit on other expenses

3. No need of way bill/ road permits (hence lower cost of compliance).

So, the trade prices also are not supposed to increase under GST.

Level playing field:

Many unscrupulous players and garage type of industry which hitherto had been getting unfair advantage because of lack of transparency will have face the heat as they will have to ensure compliance. It will lead to a better level playing field for more organised and tax compliant companies as well traders.

Importance of GST Registration & TAX Invoice under GST:

To claim input tax credit, the trader will have to have GST registration and issue TAX invoices to his customers. So, all the traders will get encouraged towards tax compliance.Any trader dealing in medicines without invoices will be disadvantaged as compared to others.