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Breakage and damage

Stock lost to physical damage rather than to expiry.

Breakage covers packs damaged in transit, in storage or at the counter — crushed strips, broken vials, torn cartons. Some distributors accept it within a claim policy; much of it is absorbed by the shop.

For GST it follows the same rule as destroyed stock: Section 17(5)(h) blocks input tax credit on goods lost or destroyed, so the credit is reversed. Where the supplier issues a credit note instead, the reversal follows the credit note.

Breakage should be recorded separately from expiry in the stock register. Combining them hides which of the two is actually costing money, and they have completely different remedies — one is a storage and handling problem, the other a purchasing and rotation problem.

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Related terms

Return to vendor (RTV)Sending stock back to the supplier, typically for expiry, breakage or wrong supply. Input tax credit (ITC)Credit for GST paid on purchases, set off against GST collected on sales. Expiry returnSending near-expiry or expired stock back to the distributor for credit. Cold chainThe unbroken refrigerated storage and transport required for temperature-sensitive medicines.

All terms

Batch numberBreakage and damageCDSCOCGST, SGST and IGSTCold chainCredit noteDPCO (Drugs Prices Control Order)Drug licence (Form 20 / Form 21)Expiry returnFEFO (First Expiry First Out)Generic vs branded medicineGSTR-1GSTR-3BHSN codeInput tax credit (ITC)Loose sale (cut strip)MRP (Maximum Retail Price)Narcotic registerNear-expiry stockNPPAPack factor (units per pack)Pharmacist registrationPTR (Price to Retailer)PTS (Price to Stockist)Purchase invoiceRed-border warning labelReorder levelRetail vs wholesale drug licenceReturn to vendor (RTV)Rule 65Rx symbolSalt compositionSchedule HSchedule H1Schedule XScheme goods (free goods)Shortbook (short book)Stock rotationStockist

This glossary is a practical reference for Indian retail pharmacy, not legal, tax or clinical advice. Requirements under the Drugs & Cosmetics Rules are enforced by state drug control authorities and vary; GST treatment should be confirmed with your CA. Verify anything you intend to rely on against the current notified position. As of August 2026.