What is GST (Goods and Services Tax)?
Imagine India as a big market. Before GST, if a product moved from one state to another, or from a factory to a shop, many different taxes were added at different steps. It was like paying tolls at many small gates. This made things complicated and expensive.
GST is simply ONE BIG TAX. It replaced almost all those old, confusing taxes (like sales tax, service tax, excise duty, etc.) with a single tax.
Think of it like this:
- You make a product. You add GST.
- You sell it to a wholesaler. They pay you GST.
- The wholesaler sell sit to a shop. They add GST.
- The shop sells it to you (the customer). They add GST.
The clever part is: At each step, the business can reduce the GST they owe by the GST they've already paid when buying things for their business. This is called Input Tax Credit (ITC). It means you only pay taxon the "extra value" you add, not on the whole amount again and again.
Is GST Mandatory to get a PCD Pharma Franchise?
A PCD Pharma Franchise means you are becoming a distributor for a pharmaceutical company. Means you Buy medicines in bulk from the main PCD pharma company. And sell these medicines to other shops (like medical stores, pharmacies),doctors, or hospitals.
This act of selling to other businesses (B2B - Business to Business) is what the government calls Wholesale Medicine Business.
Here's why GST is a MUST for this:
- It's the Law for Wholesalers: The government says if you are doing wholesale business(selling to other businesses), you must be registered for GST. It doesn't matter if your business is small initially; as awholesaler, you have to register.
- To Get Your Money Back (Input Tax Credit):
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When you buy medicines from the pharma company, you will pay them GST.
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When you sell those medicines to a local chemist shop, you will collect GST from them.
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If you are GST registered, you can tell the government, "Hey, I already paid 120amounts of GST when I bought these medicines at 1000. Now I collected 144amount GST selling at 1200. I only owe you the difference 144-120=24."This saves you a lot of money and makes your business profitable.
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If you are NOT GST registered, you cannot claim that 120 amounts back. It becomes an extra cost for you, making your medicines more expensive than your competitors, and you'll lose money.
- Companies Won't Deal with You: No legitimate pharmaceutical company will give you a PCD franchise if you are not GST registered. Why? Because they need your GST number to legally sell to you and to claim their own tax benefits.
- You Need to Issue Proper Bills: When you sell medicines to other shops, they will demand a proper GST bill so they can also claim their Input Tax Credit. Without GST, you can't issue such a bill.
- So, in short: You need GST because it's the law for wholesalers, it saves you money (through ITC), and legitimate companies won't work with you without it.
How to Apply for GST? Here are very Simple Process.
The entire process is online. You don't need to visit offices physically for most steps.
- Go Online: Visit the official GST website: https://www.gst.gov.in
- Start New Registration: Find the "New Registration" option.
- Basic Info (Part A):
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You'll fill in your name (or your company's name), your PAN card number (important!), email, and mobile number.
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You'll get an OTP (one-time password) on your phone and email to verify.
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After this, you get a Temporary Reference Number (TRN).Write it down!
- Detailed Info (Part B):
- Log in again using your TRN.
- Now, you'll fill in more details about your business
- Your business address: The address of your PCD Pharma franchise office/warehouse.
- Your bank account details: Where your business money is.
- Who is in charge: Details of the owner/partners/directors.
- What you sell: You'll mention you're dealing in pharmaceutical products(medicines).
- Upload Documents: This is where you'll upload scanned copies of important papers.
Make sure they are clear. Common documents are:
- Your PAN card (of the individual or company).
- Your Aadhaar card.
- Proof of your business address(like an electricity bill for your shop, or a rent agreement if you rent the place).
- A cancelled cheque or bank statement showing your bank account.
- Your recent photo.
- Any business registration proof (e.g., if you formed a partnership, your partnership deed).
- Submit & Wait: Once everything is filled and uploaded, you submit it.
- Officer Check: A GST officer will quickly review your application. Sometimes, they might ask for more information or clarification if something is unclear. You'll get an email/SMS if they do. You just reply online.
- Get Your GSTIN: If everything is correct, they will approve it, and you will get your GSTIN (Goods and Services Tax Identification Number). This is a 15-digit unique number for your business.
For more details you can visit Central Board of Indirect Taxes & Customs (CBIC)- Official website (for GST laws, notifications, rates): https://www.cbic.gov.in/
That's all. Once you have your GSTIN, you are officially a GST-registered business and can start your PCD Pharma franchise operations legally.
This is not so difficult. If you organize your documents well, it's quite manageable. Many small business owners apply for GST themselves, or they get help from an accountant (CA) if they feel unsure.