Small chemist retailers across India are facing a severe financial crisis due to the recent GST rate changes, turning the situation into what the All India Organisation of Chemists and Druggists (AIOCD) terms a “No GST Bachat Festival” for these vulnerable traders.
Representing over 12.5 lakh small chemists and distributors, AIOCD has urgently appealed to the Union Finance Ministry to provide immediate relief, warning that without intervention, many small retailers could be forced to shut down, disrupting medicine availability—especially in rural and remote areas.
AIOCD President JS Shinde and General Secretary Rajiv Singhal in the memorandum said that the core issue lies in the steep reduction of GST rates on medicines—from 18% to 5%, 12% to 0%, and 12% to 5%—which, while benefiting consumers, has severely impacted small traders’ financial health.
“Most small chemists are either not registered under GST or operate as composite dealers, making them ineligible for Input Tax Credit (ITC). This leaves them unable to recover the tax difference on stock purchased at higher GST rates but now required to be sold at lower prices due to new regulations, compounded by strict pricing controls from the National Pharmaceutical Pricing Authority (NPPA),” said Singhal.
Adding to their hardship, many political leaders and GST officials at their shops have been highlighting consumer benefits of the GST cuts, but fail to address the deep losses borne by small retailers who are “being compelled to sell at a loss,” he added.
To mitigate these challenges, AIOCD has proposed, allowing small chemists to sell existing stock at the old Maximum Retail Price (MRP) for at least three months to avoid further financial losses.
The Government must announce a special relief package to compensate small traders for the unavoidable losses incurred during this transition. It should also ensure no harassment, coercion, or penalties against small retailers during this critical period.
The organisation stressed that while the GST reforms are a historic step forward, “small retailers are paying the price for this transition.”
“Without swift government intervention,” AIOCD cautioned that many small chemists, especially in rural and remote regions, could be forced to shut down—putting access to essential medicines at risk.
“This reform must not come at the cost of the country’s last-mile healthcare providers,” the organisation stressed.
