Health is always an important part of everyone’s life. The medical business is the most evergreen business, which is unaffected by the economic cycles. There is an enormous growth of the healthcare and Pharmacy business in India because of increasing popularity of corporate and multispecialty hospitals in India. Many Entrepreneurs want to invest in Pharmacy business because it requires minimal capital investment and space. Apart from all these, a medical store has a big responsibility associated with them. A little mistake may turn out to be a huge loss for the customer. These medical stores need to abide by many legal procedures before they they start selling medicines. In this article, we will discuss all you want to know about the medical store business, related Income tax return, business registration and ISO registration in India.
Types of Medical stores
At the initial stage you need to choose a type of medical shop which you want to open. There are different types of medical shops, such as:-
- Hospital Pharmacy or a medical store
- Homecare Pharmacy
- Standalone Pharmacy/ Community/ Pharmacy
- Compounding Pharmacy
- Chain Pharmacy
- Township Medical Store
- Stores in Government Premises.
Individuals should fulfill the following requirements before applying for registration of pharmacy business:-
1. Pharmacy License: – For obtaining a pharmacy license, you need to be a qualified pharmacist to register your Pharmacy with your degree of B Pharm / M Pharm.
The sale of the drug by retail should be made in presence of registered Pharmacist approved by the department, the registered pharmacist is required through the working hours.
2. Land Registration: – On the basis of need and requirement every business decide about the investment. It depends on the budget, one may decide to choose between a rental shop or an own shop. A person may choose rent deed or a sales agreement to take legal assistance for this purpose.
3. Registration of Medical Shop Business: – In India, the registration of Medical stores is governed by the Indian Pharmacy Act 1948. As per this Act medical stores and Pharmacies must register with all their particulars with the state government. The Hospital, Chain and Township medical stores fall under private limited company while a standalone medical store can be setup as a partnership firm or proprietor firm. Limited liability partnership (LLPs) can also be registered for medical stores.
4. Company Registration: – While starting this business a lot of people tend to ignore the company registration. However, registering your pharmacy business as a partnership firm registration, proprietorship firm registration or as a company is very important. It depends on you which type of business firm you want to operate. Following are options you may choose from:-
- Proprietorship Registration
- Partnership Registration
- Sole Proprietorship Registration
- Private Limited company
- Limited Liability Partnership.
Tax Registration: – From 1st July 2017, Goods and services tax came into effect, so you also need to make sure that your medical store is registered for GST. However, you don’t need to do CST and VAT registration. If the aggregate turnover in a financial year exceeds the threshold limit, you must acquire GST registration for your business. GST council specified the limit as INR 20 lakh for all states other than the North- Eastern Hilly states where the limit is INR 10 lakhs. The person who owns a medical store needs to file the Income-tax return. Income tax return for a medical store needs to be filed under the ITR form 4s. ITR 4s in 44AD need be filed by those who have turnover more than 2 crores.
ISO Certification: – OHSAS180001 is a globally recognized ISO Certification standard for Occupation health and safety and define the protection system of health and labor of an organization. This OHSAS180001 ISO Certification establishes an organization committed to providing a safe working environment to protect employees & other concerns.
Registration for the Drug License: – Before starting a medical store, be it big or small, you would require a drug license from the Central Drugs Standards Control Organization and State Drugs Standards Control Organization which issues two major drug license:-
- Retail Drug License: – For running a general chemist shop this license is required. Fee for this has to be deposited. A person who possess a degree or diploma in Pharmacy, the registration can be done only in his name.
- Wholesale Drug License: – This license is issued for medical stores which dealing in the wholesale business for drugs and medicines.
For obtaining a Drug License minimum requirements are :-
Area Specification: – 10 square meters is the minimum area requirement for common retail and for wholesale business it is 15 square meters.
Storage Facility: – Refrigerator and air conditioner must be equipped at the medical store. This is an important requirement because labeling specification require certain drugs like Vaccines, Sera, Insulin injections etc. to be stored in the refrigerator.
Technical Staff:- Both the wholesale and retail medical shops require technical staff:-
- Wholesale Business: – In presence of the registered Pharmacist the sale of the drugs shall be made and he should have at least one year experience in dealing in drugs. Otherwise, there has to be a person who has passed S.S.L.C. with an experience of 4 years approved by the Department of Drugs Control.
- Retail Business: – At the time of sale of medicine during the working hours the registered Pharmacist must be present there.
Essential Documents for obtaining a Drug License: – Documents required for obtaining a Drug License varies from state to state. Here is an indicative list of documents required for obtaining Drug License in India:-
- Application form in the prescribed format in the act.
- A cover letter with the details of name and designation of the applicant with application duly signed.
- For registration a challan of the fee deposited.
- Premises blueprint (Site plan and Key plan).
- Declaration form in the prescribed format in the act.
- Proof of the Premises ownership, if rented.
- Proof of registration and business constitution.
- Affidavit of non-conviction of proprietor or partners or directors under the Drug and Cosmetics Act, 1940.
- Affidavit of a registered Pharmacist/ person equally competent who will be working for full time.
- Appointment letter from a registered pharmacist or any competent person, if employed person.
In this article, we have told you how to open a medical shop in India, how to file an Income tax return, discussed about ISO Certification, important documents and other requirements for opening a medical store. We hope that with the help of this article you got all your questions answered related to opening of medical shop or store.