Health and wellness

GST invoice format for a pharmacy (medical store)

A pharmacy bill has to carry more than the usual GST fields. Each medicine line needs its batch number, expiry date, manufacturer and MRP, and the header needs the drug licence numbers (Form 20 and 21). Schedule H and H1 drugs need the prescribing doctor's name. Since 22 September 2025 most medicines under HSN 3004 are taxed at 5%, and a handful of listed life-saving drugs are nil-rated, so the bill must apply the right rate on each line rather than one flat rate.

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Sample pharmacy invoice

Description	HSN/SAC	Qty	Rate (₹)	Taxable (₹)	GST
Paracetamol 500 mg tablets (strip of 10)	3004	10 STRIP	30.00	300.00	5%
Amoxicillin 500 mg capsules (strip of 10)	3004	2 STRIP	95.00	190.00	5%
Cough syrup 100 ml	3004	1 BTL	115.00	115.00	5%
Sterile adhesive bandage strips (pack of 20)	3005	1 PCK	60.00	60.00	5%
Blood glucose test strips (pack of 50)	9027	1 PCK	850.00	850.00	5%
Taxable value				₹1,515.00
GST (CGST + SGST, or IGST if inter-state)				₹75.76
Invoice total				₹1,590.76

Sample prices are illustrative. Check the GST rate for your exact item or service before billing.

Extra fields a pharmacy invoice needs

Drug licence numbers (Form 20/21): State drug controllers require the retail sale licence numbers to be shown on cash memos. Print both the allopathic (Form 20) and Schedule C/C1 (Form 21) numbers in the header so an inspector can match each bill to the licensed premises.
Batch number: Every strip, vial or bottle comes from a manufacturing batch. Printing it on the bill lets you trace a recalled batch back to the patients who bought it and match returns against the right stock lot in your inventory.
Expiry date: Expiry is printed next to the batch so the patient can see it at the counter and so you can prove you never sold expired stock. Store the month and year exactly as printed on the pack.
Manufacturer / marketer: Two brands of the same molecule can have different prices and recall histories. Naming the company on each line avoids confusion when a patient comes back for a refill or a return.
MRP and discount: Medicines are sold against a printed MRP under price-control rules. Show MRP, your discount and the net rate so the customer sees the saving and you can show the selling price never crossed MRP.
Prescribing doctor and patient name: For Schedule H, H1 and X drugs, the doctor's name and registration and the patient's name are recorded with the sale. The H1 register must be kept for three years, so capturing them on the bill saves a second entry.

Standard GST invoice fields

Rule 46 of the CGST Rules applies to every tax invoice, including this one:

Supplier name, address and GSTIN
Consecutive invoice number (max 16 characters, unique for the year)
Date of issue
Customer name, address and GSTIN (if registered)
Place of supply with state name
HSN/SAC code per item
Description, quantity and unit
Taxable value after discounts
GST rate and CGST + SGST or IGST amounts
Signature or digital signature

GST rules that matter for a pharmacy

Medicines moved from 12% to 5% on 22 September 2025

The 56th GST Council meeting cut the rate on almost all drugs and medicines from 12% to 5%, effective 22 September 2025. That covers HSN 3003 and 3004, including Ayurvedic, Unani, Siddha and homoeopathic medicines put up for retail sale. Thirty-six specified life-saving drugs, mostly for cancer and rare diseases, became nil-rated. A pharmacy should update the rate on every item master rather than editing bills by hand, because stock bought before the change still carries a 12% printed price but must now be billed at the new rate. Check whether any product you stock is one of the nil-rated molecules.

Bandages, gloves and diagnostic strips are also 5% now

Pharmacies sell more than medicines. Wadding, gauze and bandages (3005), surgical and examination rubber gloves (4015), diagnostic kits and reagents (3822), glucometers and test strips, and medical thermometers (9025) were all brought to 5% in the same round. Toothpaste, toothbrushes, hair oil, shampoo, talcum powder and toilet soap also moved to 5%. Products like perfumes or sunscreen that were not listed in the cut may still sit at 18%, so a counter selling general merchandise needs separate rates per item, not a single store-wide rate.

Composition scheme for small medical stores

A retail pharmacy with turnover up to ₹1.5 crore can opt for the composition scheme and pay a flat 1% on turnover. A composition dealer cannot charge GST on the bill and must issue a bill of supply that says 'composition taxable person, not eligible to collect tax on supplies'. Many pharmacies prefer regular registration because hospitals and clinics buying from them want input tax credit, and because the 5% output rate is now close to the input rate, so credit rarely piles up. Weigh both before switching.

MRP is tax-inclusive, so back-calculate the taxable value

The MRP printed on a strip already includes GST. For a ₹105 MRP item at 5%, the taxable value is ₹100 and GST is ₹5, split as ₹2.50 CGST and ₹2.50 SGST. A common billing error is adding 5% on top of MRP, which overcharges the patient and breaks price-control rules. Your software should take the selling price as inclusive and compute the tax inside it, then show the taxable value per line.

Expired-stock returns and credit notes

When a distributor takes back expired or near-expiry medicines, the correct document depends on who issues it. If the distributor gives you a credit note under section 34, it reduces their output tax and you must reduce your input tax credit. If you instead raise a tax invoice for the return, treat it as a fresh supply. Agree on the method with each distributor and keep the batch numbers on the return document so stock and tax registers stay matched.

Common billing mistakes

Adding 5% GST on top of the MRP instead of treating MRP as tax-inclusive, which overcharges the patient and puts the selling price above MRP.
Still billing medicines at 12% after 22 September 2025 because the item master was never updated after the rate cut.
Leaving out batch and expiry on the bill, so a recalled batch cannot be traced and returns cannot be matched to stock.
Charging GST on the bill while registered under composition, when the law requires a bill of supply with no tax.
Selling Schedule H1 antibiotics without recording the doctor's name and patient details that the register must hold.

Pharmacy GST invoice: FAQ

What is the GST rate on medicines in a pharmacy bill?

Since 22 September 2025 most drugs and medicines under HSN 3003 and 3004 are taxed at 5%, down from 12%. Thirty-six specified life-saving drugs are nil-rated. Bandages, gloves, diagnostic kits, glucometers and test strips are also at 5%. Check each item's HSN rather than applying one rate across the store.

Is the drug licence number mandatory on a medical store bill?

GST law does not require it, but drug control rules expect the retail sale licence numbers on cash memos, and inspectors check for them. Print both licence numbers in the bill header so every invoice carries them automatically.

Can a pharmacy issue a single bill for medicines at different GST rates?

Yes. One invoice can hold items at 0%, 5% and 18%. Each line must show its own HSN, rate and tax amount, and the totals should summarise the taxable value and tax at each rate so the customer and your GSTR-1 match.

Should a pharmacy bill show HSN codes?

Yes. Businesses with turnover up to ₹5 crore must show at least a 4-digit HSN on B2B invoices, and above ₹5 crore a 6-digit HSN. For medicines this is usually 3004. Showing it on retail bills too keeps your GSTR-1 HSN summary accurate.

Sources: GST Council — PIB press release on 56th Council rate rationalisation (3 Sep 2025) · CBIC — Tax information portal (rate and exemption notifications)

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