The Government of India has implemented GST 2.0 from 22nd September 2025 – the biggest tax reform for the pharma industry.
In the 56th GST Council meeting, a major decision was taken that now the tax slab on most products and services will be 5% or 18%, while higher rates on luxury and “sin goods” will continue.
This change will directly impact the MRP of medicines, medical devices and healthcare products. Therefore, every pharma manufacturer and distributor is required to update the MRP as per the new tax rate of their products.
One-Click New MRP Calculator for Sanhok Pharma
Now the countdown is over!
The easy tool created by Sanhok Pharma will help you to extract the new MRP in a few seconds.
Open a new MRP calculator (after GST 2.0)
Just enter your old MRP and tax slab – and get the new GST-compliant price instantly.
- Simplification of slab structure.
Now most of the products have been kept in only 5% or 18% tax slab. This change is effective from 22nd September, 2025. (Goods and Services Tax Council)
2) Relief to the healthcare sector
Many common medicines, healthcare equipment and everyday medical items are now in the 5% GST category so that the common consumer can get affordable medicines. (Press Information Bureau)
3.Transmission Support
The government has allowed companies to display the new MRP through stickers or re-printing on old packs till December 31, 2025.
Both the old and new MRP should appear on the pack.
The price change should be based only on the tax difference.
(Business Standard)
What does this mean for the pharmaceutical industry?
1.Quick benefits to consumers.
The reduction in GST rates will reduce the final retail price (MRP) of many drugs. This will further increase the price competition between the brands.
(2) Impact on working capital.
Now many outputs are at 5% while raw materials (API, KSM) will remain at 18%.
This will create an inverted duty structure – that is, input tax credit (ITC) will accumulate more and cash-flow may slow down a bit. (EY Analysis)
3.Packaging and Compliance
Companies can print the new MRP on their old stock. Just keep in mind – the difference is only in the tax deduction, so that there is no case of “profiteering.”
- Document Tracking
Keep a record of every modification – pack photo, batch number, and MRP change log. This will ensure transparency in future audits.
An easy way to extract a new MRP (practical example)
A simple way to create a new MRP
The simple formula:
New MRP = (Pre-tax Cost + Trade Margin) + New GST
If your old GST was 12% and now it has become 5%, then you only have to show the effect of tax reduction – Keep the margins the same.
Now there is no need for manual calculation.
Sanhok Pharma’s “MRP Calculator” will give you accurate and compliant MRP in seconds.
Action Plan for Manufacturers and Distributors
1.Perform Portfolio Audit
Classify each SKU according to its HSN code and the new tax rate. (GST Council)
2 Recalculate MRP
Prepare the updated price list of all the products according to the new rates with the help of MRP calculator.
3.Transitioning the old stock.
Put a new MRP on the old pack with a sticker or stamp. The old MRP should also be clearly visible.
Keep a record of all changes… Logs, photos, batch details, etc. (Business Standard)
4.Update the ERP and billing system.
Update GST Rate Masters, MRP and Tax Codes. Generate new labels and barcodes so that there are no discrepancies in the billing system.
5. (GST Council) ITC and cash-flow planning.
Keep an eye on the refund cycle of Input Tax Credit (ITC).
Adjust supply chain and procurement timing as required. (EY Advisory)
6.Inform the distribution network immediately.
Share the new price list immediately.
Send updated circulars and guidelines to all RSOs, CFAs, dealers and retailers.
General Questions of Trade and Institutions (FAQs)
Question 1: When will the new GST rates be implemented?
All the revised rates will be effective from September 22, 2025. (GST Council)
Question 2. Are the old packages still available for sale?
Yes, the old packs can be sold with new MRP stickers or re-printing till 31st December 2025 or till stocks last.
Keep in mind, the difference should be limited to tax changes only. (Business Standard)
Question 3. Are retailers required to change labels?
No no. It is the responsibility of the manufacturer or packer, retailers are not obliged to label themselves. (Times of India)
Question 4. Will 5% GST be applicable on all pharma inputs too?
No, many APIs and KSMs are still in the 18% tax slab. This can lead to inverted duty structure and ITC accumulation. (EY Report)
Question 5. Will a separate certificate be required for new packs?
It will be appropriate to mention “Revised MRP due to GST 2.0” on every new or relabeled pack so that transparency is maintained.
Sanhok Pharma’s vision: Growth with Compliance
Sanhok Pharma believes that GST 2.0 is not just a tax rate change but a big step towards a transparent and competitive market system.
We are providing timely updated MRP, sticker support and documentation guidelines to all our distributors, medical representatives and business partners.
Our aim is to reach every customer at the right price, at the right time and with the right packaging.
The conclusion: Now move quickly with the change.
GST 2.0 has given a new direction to the pharma sector.
The tax structure is simplified,
The drugs are cheap,
And transparency for companies is built and strengthened.
Now it is the responsibility of every manufacturer and distributor to implement this change quickly and accurately.
When speed and accuracy matter, Sanhok Pharma’s New MRP Calculator will be your perfect companion.
[Remove new MRP now- as per GST 2.0.