Wahdat Road connects several of Lahore's western neighbourhoods and has a share of the city's medicine wholesale and distribution businesses, supplying pharmacies, clinics and hospitals. Distributors hold drug sale licences, buy from manufacturers under distribution agreements, and supply hundreds of pharmacies on credit.
Licensing
Medicine wholesalers and distributors need drug sale licences under the drug laws, with conditions on storage and record-keeping. Licensed status is also what manufacturers require before appointing you.
Supply chain
| Point | Tax |
|---|---|
| Manufacturer supplies distributor | Medicines' sales tax treatment; manufacturer may collect advance income tax |
| Distributor supplies pharmacies | Advance tax may apply on supplies to retailers in some cases |
| Trade discounts and schemes | Income or reduction of cost |
Medicines have specific sales tax treatment that has changed in recent budgets. See pharma manufacturers.
Credit to pharmacies
Distributors supply pharmacies on weekly or monthly credit. Receivables at 30 June are assets; uncollectable debts are losses if documented.
Expiry claims
Expired stock returned by pharmacies is claimed back from manufacturers under distribution agreements. Claims accepted are credits; unclaimed expiry is a loss.
Cold-chain products
Vaccines and insulin need refrigeration; equipment is a capital asset and electricity a cost.
Delivery and staff
Order bookers, delivery riders and warehouse staff: payroll, withholding, EOBI and social security.
Reconcile monthly with each manufacturer: supplies, schemes, claims and payments. Distributors' disputes with principals usually start with unreconciled claims.
Bank and credit facilities
Distributors often use running finance from banks to fund stock. The facility balance is a liability; markup is a business cost. Banks will ask for filed returns and accounts when renewing limits.
Delivery vehicles
Distributors' delivery vans and motorcycles are assets with advance tax at registration and token, credited if registered in the distributor's name.
Supplying hospitals and clinics
Distributors also supply private hospitals and clinics on account, often with tax withheld by the buyer. Keep a ledger per institution and collect certificates. Hospitals pay late; receivables at 30 June are assets.
Storage conditions and inspections
Drug inspectors check storage conditions and records. Temperature logs, purchase invoices and sales records serve both regulatory and tax purposes.
Returns from pharmacies
Unsold, near-expiry stock is often returned by pharmacies. Record returns against original sales and claim them from manufacturers where possible.
Staff on commission
Order bookers often earn commission on sales. Record commissions with salaries; above the threshold, withholding applies.
Wahdat Road — questions we get asked
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WhatsApp a photo of your CNIC and whatever paperwork you have. We reply with the exact fee before any work starts.