Exports from the Indian pharmaceutical sector may reach Rs 3,27,700 crores during the current fiscal due to positive impacts of implementation of Goods and Services Tax (GST), said Minister of State for Chemicals & Fertilizers Mansukh Mandaviya on Thursday.

As per estimates, the export figure for the current year is likely to be Rs 3,27,700 crore, which will be almost 12% higher than the export figure of Pre-GST regime (2016-17), said Mandaviya in an official statement in New Delhi.

Exports from pharma sector during 2016-17 were Rs 2,75,852 crore while post-GST, in the year 2017-18, they were recorded at Rs 3,03,526 crore, which is 10% higher than the Pre-GST Regime, he added.

He added that before GST, annual turnover of the sector (as on 31.05.2017) was Rs 1,14,231 crores while after GST, the annual turnover of Pharma sector (as on 31.05.2018) touched Rs 1,31,312 crores, which is 6% higher than the Pre-GST regime.

Impact of Goods and Services Tax (GST) on Pharma sector has largely been positive and constructive, the minister pointed out.

Further, he informed that there has been a significant jump in number of drug approvals from 7,857 before GST (01.07.2016 to 30.06.2017) to 10,446 post-GST (01.07.2017 to 30.06.2018).

Elaborating on the reasons for this positive impact post-GST, Mandaviya said that under the ‘One Nation, One Tax’ regime, the removal of complexity of multiple taxes has reduced their cascading effect on the final product.

GST is expected to decrease the manufacturing cost in view of merging of different taxes levied earlier and promote ease of doing business. It will create one single market for all stakeholders with equal chance towards development, he said.

Mandaviya informed that due to discontinuation of Central Sales Tax post-GST, it will reduce transaction costs, as inter-state transaction between two dealers will become tax neutral.

Now, the pharma companies can consolidate their warehouses at strategic locations, effecting a reduction in cost of distribution. As a result, it will benefit warehouse strategy and improve supply chain efficiency in pharma sector, the minister explained.