How to Start a Pharmacy Business in India

Last Updated at: September 28, 2019
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The pharmacy business is growing rapidly in India, with greater acceptance of modern medicine in smaller parts of the country and the arrival of the online pharmacy. At the same time, it isn’t easy to access credible information about what it takes to start such a business. Well, look no further. Here’s all you need to know about starting up as a pharmacist in India.

Getting a Drug License

All pharmacies must have a drug license, which can be procured from the State Drug Control Organisation, the offices of which you State-Drugs-Control-Organization-List. The body is authorised to give licenses to retail pharmacies as well as wholesale pharmacies. As the sale of drugs to consumers is to be tightly controlled, the approval rate of retail licenses is slightly lower, whereas getting a wholesale pharmacy license is relatively simple. To obtain the license, you must have the following documents:

1. Application for the license in the prescribed format.

2. Covering letter from the applicant stating reasons for business.

3. Blue print and site plan of the premises.

4. Proof of ownership of the business.

5. Business license (Incorporation Certificate/Partnership Deed, etc)

6. Appointment letter of registered pharmacist.

7. Proof of innocence of proprietor/partner/director w.r.t Drug and Cosmetics Act, 1940.

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Other Requirements

1. To start a medical pharmacy, the area of the shop must be a minimum of 10 square metres. In case the shop has both a wholesale and retail license, it must be 15 square metres.

2. The pharmacy must have all the medical equipment required, the medication must be properly labelled, and the shop must contain the necessary refrigerators, where certain drugs are to be stored.

3. All pharmacies must have a registered pharmacist working at all times. If there is no pharmacist, then in the presence of a person dealing drugs for at least one year or a person who has passed the SSLC with four years’ experience.

Value Added Tax

VAT is a form of indirect tax levied at various stages of production of services and goods. It is also imposed on imported goods as well but the same rate as that of local product is maintained. VAT is imposed on value addition at every phase of production. The final consumers will be the ultimate bearers of this tax. This is an indirect but coherent form of taxation and involves transparency so that it is easily understandable. Registration is required once revenues of the business cross Rs. 5 lakh per annum.

Company Registration?

A pharmacy need not have a company registration, as the main licence is from the drug control organisation. So you may register the business as a partnership, proprietorship, limited liability partnership (LLP), or even a private limited company. The big advantage to registering as a company (or an LLP) would be limited liability, which would protect your personal property from any debts incurred by the business. Moreover, loans, partnerships and licences are always easier to get as a registered entity, as compared to a proprietor.

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