CTMR welcomes GST rate cut on Siddha medicines, says it will boost Siddha sector & plant cultivation
The GST Council, the policy making body on goods and services tax (GST), has slashed the goods and services tax rates for the classical (unbranded) Siddha, Ayurveda, Unani and Homoeopathy medicines from the present rate of 12% to 5% in its 22nd council meeting held on last Friday.
Hailing the tax cut as a big boost to both the Siddha medicine manufacturing industry and for the medicinal plant cultivation sector in Tamil Nadu, the Centre for Traditional Medicines & Research (CTMR) in Chennai, an organization working for the development of Siddha system, has welcomed the decision of the GST Council for reducing the tax rate for the unbranded Siddha medicines.
However, the GST for the branded products (proprietary goods) of all Siddha, Ayurveda, Unani and Homoeopathy will continue under 12% category. Sources from the industry said, about 90% of all the Ayush products are branded ones.
The classical and proprietary Siddha drugs were classified under 12% GST rate from July 1 this year. Several industry bodies and organizations like CTMR had represented the government for a reduction in the tax rates for the benefit of all the stakeholders of Siddha system. Welcoming the decision of the Council to cut the GST on Siddha, Ayurveda, Unani and Homoeopathy drugs to 5%, the Secretary of CTMR, Dr. T Thirunarayanan said, “the rate of 5 per cent for Siddha medicines is progressive and will lead to the growth and development of the system which was reeling under pressure from the 12% GST from July 1. Now, on behalf of all stakeholders of Siddha system, I thank the union finance minister and all the members of the GST Council for having accepted our request for a cut in the rate”.
According to Dr. Thirunarayanan, prior to the introduction of GST three months ago, there was no excise duty (ED) for the Siddha medicines prepared as per classical texts, but a levy of 2% ED was imposed recently. Besides, there was no collection of VAT on traditional medicines in Tamil Nadu. When GST was introduced, the industry faced an increase of 10% tax. This hike in tax rate occurred at a time when the cost of medicines was increasing due to severe drought in the state that caused for a situation of non-availability of herbal raw materials. All the primary and tertiary sector Siddha hospitals were lacking medicinal stocks. Patients had to pay huge amount for the much demanded ‘Nilavembu Kudineer’, used for dengue fever, and the situation even caused the monthly expenses of elderly people go high.
On industry side, the GST introduction caused a fund crunch for working capital for all units which had to pay more taxes. Several companies could not pay salaries to their employees on time because of the 12% GST. He said the present reduction of the tax rate is a great relief to all stakeholders of Siddha industry.
CTMR has, in association with state medicinal plant board (TNSMPB) and Tamil Nadu Forest Research Institute, recently started some projects to encourage cultivation of medicinal plants and herbs. The Centre feels that the slash in tax rates will help the industry to concentrate more on classical preparations and there will be a huge demand for authentic herbs and quality medicinal plants.
Dr. Thirunarrayanan said the cut in GST for Siddha medicines will not only boost the formulation industry, but also it will encourage the medicinal plant cultivation sector.