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GST for pharmacies: a practical checklist

A practical GST checklist for Indian pharmacies: registration, rates and HSN, invoices, returns, input tax credit, expired stock, credit notes and record keeping.

10 min readUpdated 23 Oct 2026India-specific

1. Registration and scheme

A pharmacy supplying goods is generally required to register once its aggregate turnover crosses the applicable threshold, and some situations such as inter-state supply need registration regardless. Retail traders may also be eligible for the composition scheme below a turnover limit, but composition dealers cannot collect tax on invoices or claim input tax credit. Most pharmacies buying from distributors and selling at MRP use the regular scheme.

  • GSTIN displayed at the premises and printed on invoices
  • Drug licence number printed alongside GSTIN
  • Confirm scheme (regular or composition) with your CA each year

2. Rates and HSN

Medicines are classified under HSN chapter 30. The GST rate depends on the product and on notifications that have changed over time; the GST Council revised several health-related rates in 2025. Do not rely on memory: confirm the rate for each item or HSN with your CA and keep the item master updated.

  • Every item has an HSN and a GST rate in the master
  • Non-medicine items (cosmetics, devices, FMCG, food supplements) are often at different rates from medicines
  • Review the master after each GST Council notification
  • MRP is tax-inclusive; the taxable value is derived from it

3. Invoices and bills

Registered pharmacies issue a tax invoice with the mandatory particulars. Sales to consumers can use a consolidated or simplified format as allowed. A bill of supply is used by composition dealers or for exempt supplies.

ParticularWhy it matters
Supplier name, address, GSTINIdentifies the registered person
Invoice number and dateConsecutive, unique per financial year
Description, HSN, quantity, valueLine detail for returns
Tax rate and amount by CGST, SGST or IGSTSupports return filing
Place of supply and recipient GSTIN for B2BDetermines CGST+SGST or IGST

For B2B sales, capture the buyer’s GSTIN so the sale appears in their GSTR-2B and they can claim credit.

4. Returns calendar

Regular taxpayers file GSTR-1 (outward supplies) and GSTR-3B (summary and tax payment). Monthly filers and those under the QRMP scheme have different due dates. The usual pattern is GSTR-1 by the 11th and GSTR-3B by the 20th of the following month for monthly filers, with quarterly alternatives. Dates are extended or changed by notification, so check the GST portal calendar.

  • Reconcile sales register with GSTR-1 before filing
  • Reconcile purchase register with GSTR-2B before claiming credit
  • Pay tax by the due date to avoid interest
  • File the annual return if applicable to your turnover

5. Input tax credit (ITC)

ITC is generally available on purchases used for your taxable business, subject to conditions: a valid tax invoice, the supplier having filed their return so it appears in GSTR-2B, receipt of goods and payment of tax by the supplier.

  • Match every purchase bill to GSTR-2B
  • Chase suppliers whose invoices are missing
  • Reverse credit where the law requires it

6. Expired and damaged stock

Goods that are written off, destroyed or lost generally require reversal of the ITC claimed on them. When you return expired stock to a distributor, a credit note or debit note flow applies. Treat each return with a proper document and agree the process with your CA.

7. Credit and debit notes

Sales returns need a credit note referencing the original invoice, issued within the time limits in the GST law. Purchase returns need a debit note or the supplier’s credit note. Missing these documents is a common reason for mismatches.

8. E-invoicing and e-way bills

E-invoicing applies to businesses above a turnover threshold that the government has lowered over the years; distributors and chains should check whether they are covered. E-way bills are needed for movement of goods above a value threshold, with exceptions. Check current thresholds before assuming either way.

9. Records to keep

The law requires books and records to be kept for a prescribed period, which is several years from the due date of the annual return for the relevant year. Keep sales and purchase registers, stock records, invoices, credit notes, return acknowledgements and e-way bills in an accessible form.

10. Monthly checklist


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