Pharma MSMEs hit by inverted duty: Pharmexcil

Pharmaceutical MSMEs are grappling with accumulated input tax credit (ITC) in the wake of GST 2.0 reforms coming to significantly aggravate the issue of inverted duty structure.

While benefitting consumers, the reforms, introduced in September 2025, have also brought disproportionate financial stress to the MSME manufacturers. The structural imbalance that prevails may lead to reduced manufacturing capacity, supply disruptions, increased imports and employment instability, the Pharmaceuticals Export Promotion Council of India (Pharmexcil) said.