The GST Council has approved changes that will allow pharmaceutical companies to claim input tax credit (ITC) on free samples and on goods destroyed or written off after expiry of their shelf life, where destruction is required by law. The changes to GST law and rules are scheduled to take effect from the next financial year, FY 2027-28. The Council, chaired by the Union Finance Minister along with state counterparts, approved the proposals as part of efforts to rationalize input tax credit and refund provisions for the pharmaceutical sector.

The measures are intended to support manufacturing, liquidity, and exports while addressing longstanding GST-related challenges faced by pharmaceutical and life sciences businesses. The availability of ITC on free samples and expired inventory is particularly relevant for companies managing physician samples, products that reach the end of their…