How to Open a Medical Store in India: Licence, Eligibility

Updated 25 October 2026 · By Ashok Sachdev · GST rates checked against Notification 9/2025 and 10/2025-Central Tax (Rate)

To open a medical store in India, apply in Form 19 to your State Drugs Control Department for a retail drug licence (Form 20/21). You need a registered pharmacist (D.Pharm or B.Pharm) present during business hours, at least 10 m² of premises with a refrigerator, and GST registration. Set-up cost depends on location and stock, so get local quotes.

The short version: the licence and the pharmacist come first, the shop and stock second, and batch-and-expiry control decides whether the store makes money. Here is each step in order, with what it costs and how profit works.

In short

• Licence: apply in Form 19; the retail drug licence is issued in Form 20, and Form 21 for Schedule C and C(1) drugs (Drugs and Cosmetics Rules, 1945).
• Eligibility: anyone can own the store, but a registered pharmacist must supervise sales during business hours.
• Premises: at least 10 m² (15 m² with a wholesale licence too), with a refrigerator for cold-chain medicines.
• GST: medicines in retail packs (HSN 3004) are 5% from 22 September 2025; listed life-saving drugs are exempt.
• Billing: every bill must show each medicine's batch number and expiry date. See how medical store billing software handles batch, expiry and the bill, and batch and expiry tracking.

The 3 licences you must have

Unlike a grocery shop, a pharmacy is a regulated business. You cannot sell medicines legally without these:

• Retail Drug Licence (Form 20 & 21) — issued by your State Drugs Control Department. Form 20 covers general (non-schedule) drugs; Form 21 covers Schedule C and C1 drugs. This is the core licence.
• Registered Pharmacist — a person with a D.Pharm or B.Pharm registered with the State Pharmacy Council must be physically present during business hours. No pharmacist, no licence.
• GST registration — mandatory to buy stock from distributors and issue tax invoices. See our guide to the correct GST invoice format for retail shops.

You also need a local shop & establishment registration, and premises of at least 10 square metres (15 m² if you also hold a wholesale licence). A refrigerator and air conditioning are required because vaccines, insulin and some sera must be cold-stored. For the full list of permits any retail shop needs, read retail shop licences and registrations in India.

What it costs to open (2026)

Investment depends heavily on location, size and stock depth; franchise models cost more but come with brand pull and supply support. Get local quotes for each line below.

Rent, city and stock depth change every line a lot, so price each one locally before you commit.

How much a medical store actually earns

Margins vary sharply by product type: generics and OTC products usually leave more margin than branded medicines, which is why product mix decides your profit, not just turnover. Work out your own margins from your purchase rates with the free profit margin calculator.

Net profit is what is left after rent, salaries, electricity, stock finance and expiry losses. Pushing generics and OTC is usually the biggest lever on that number; track it monthly with the profit and loss calculator.

Worked example: one month at a ₹6 lakh store

Take a neighbourhood medical shop in a tier-2 city such as Nashik or Lucknow selling ₹6 lakh a month. The figures are illustrative, but the structure is how every pharmacy P&L works.

Two levers move this number most. Shifting just 10% of sales (₹60,000) from branded to generic medicines adds about ₹6,600 a month. Halving expiry write-offs adds another ₹3,000. Know the difference between markup and margin before you set prices, and read your profit and loss report every month rather than at year end.

GST on medicines from 22 September 2025

Medicines in retail packs (HSN 3004), including Ayurvedic and homeopathic medicines, are taxed at 5%, down from 12%, under Notification 9/2025-Central Tax (Rate). The life-saving drugs listed in the annexure to Notification 10/2025-Central Tax (Rate) are exempt (0%). Bandages, cotton, gloves, glucometers, test strips and diagnostic kits are 5%. Map each product to its HSN and rate once in your billing software. Details: GST on medicines and the medicines HSN page.

Inventory: the batch-and-expiry problem

This is what separates a pharmacy from every other retail shop. Every medicine must be tracked by batch number and expiry date, and by law your bill to the customer must print the drug name, quantity, batch number and expiry. Get this wrong and you carry two risks: dead stock from expired medicine, and legal exposure.

• Follow FEFO (First Expiry, First Out) — sell the nearest-expiry batch first, not just the oldest purchase. Use FIFO only when purchase order matches expiry order.
• Set expiry alerts at 90 and 30 days so you can return near-expiry stock to the distributor before it is worthless.
• Reconcile by batch, not just by product name — the same medicine sits in multiple batches with different expiry dates.

RichPOS records the batch and expiry date when stock comes in and sells the earliest-expiring batch first (FEFO); see batch and expiry tracking and RichPOS for medical stores. Manual registers cannot do this reliably once you cross a few hundred SKUs. This is where pharmacy-aware retail inventory management and the right billing software checklist pay for themselves.

What a medical store application must offer

The billing app you choose decides how much three daily problems cost you: expired stock, queues at the counter and the month-end GST work. Look for these features, each tied to the problem it fixes. Every feature in the right-hand column is one RichPOS has today.

What RichPOS does not do: it is general retail billing software with batch and expiry tracking, not a pharmacy-specific system. It does not keep drug-licence registers such as Schedule H1 records or store prescriptions, it needs an internet connection (no offline mode), and it does not generate e-invoices or e-way bills. Check your state's record-keeping rules alongside the trial. Details: batch and expiry tracking, udhaar and WhatsApp reminders, Tally export.

Example: how a neighbourhood medical store would use RichPOS

This is an illustrative walkthrough, not a customer story. It shows the steps only; it does not claim any results.

1. Make a CGST/SGST bill. A customer buys a strip of a 5% medicine (HSN 3004). The pharmacist scans it; RichPOS picks the batch that expires first and bills 2.5% CGST + 2.5% SGST. The batch number and expiry print under the item.
2. Print barcode labels. A distributor delivery arrives with some items that carry no usable barcode. The owner enters the purchase with batch and expiry, prints barcode labels for those items and sticks them on, so the next sale is a scan.
3. Send the bill and an udhaar reminder on WhatsApp. A regular customer takes monthly medicines on credit. The bill goes to their account and is sent to them on WhatsApp; at month end the owner sends a due reminder from the customer's record.
4. Give the CA the GST report. At month end the owner exports the sales and purchase GST reports by HSN and rate to Excel, or as a Tally file, and sends them to the CA, who files GSTR-1 and GSTR-3B. RichPOS does not file returns itself.

Medical store application checklist

• HSN code and GST rate saved per item, with a CGST/SGST or IGST split on the bill
• Batch number and expiry on every purchase line, not one expiry per item
• FEFO picking at the counter and a block on expired stock
• An expiry report for 30, 60 and 90 days
• Barcode scanning and barcode label printing
• Customer dues with part payments and a credit limit
• Bills and due reminders on WhatsApp
• GST reports and a Tally export for your CA
• Data kept online, not only on one shop PC, plus Excel, CSV or PDF report exports so you keep your own copy

Try it on your own stock: the 30-day free trial needs no card and includes the full plan, up to 200 items and customers, 500 invoices, 1 warehouse and 1 user. A pharmacy usually stocks more than 200 items, so use the trial to test the billing and expiry flow on your fast movers. After the trial the monthly plan is ₹99/month for the first 3 months, then ₹199/month; or pay ₹2,000/year. Start the free trial.

Your first-month setup plan

1. Register your pharmacist and apply for the Form 20/21 retail drug licence.
2. Finalise premises (≥10 m²), get shop & establishment registration and GST.
3. Install a fridge and AC; set up racking with a clear schedule-drug section.
4. Onboard 2–3 distributors; build opening stock weighted toward fast-movers, generics and OTC.
5. Set up billing software with batch/expiry tracking and UPI payment acceptance from day one.
6. Print GST-compliant bills that carry batch and expiry — it is a legal requirement, not optional.

Thinking about a general kirana instead? Compare with our guide on how to start a grocery store in India.

Drug store setup checklist: licence application step by step

Rule numbers are from the Drugs and Cosmetics Rules, 1945, as amended (text published by state governments and by the Central Drugs Standard Control Organisation, CDSCO). Fees and online portals differ by state; check your State Drugs Control Department before you apply.

Free tools: profit margin calculator; HSN and GST rate finder; stock reorder calculator; Excel stock register and GST purchase register.

Bottom line

A medical store is a licence-heavy, inventory-disciplined business, but demand is steady and margins on generics and OTC are strong. Get the drug licence and pharmacist right, control expiry from day one, and run GST-correct billing.

RichPOS gives Indian shops fast barcode billing on thermal or A4 with UPI, card and cash (see Billing & POS), and GST-ready sales and purchase reports by HSN/SAC plus profit reports (see GST & reports). It costs ₹99/month for the first 3 months, then ₹199/month, or ₹2,000/year, after a 30-day free trial. For a demo, call +91 90333 31255 or start from the pricing page.

Sources: Drugs and Cosmetics Rules, 1945 (Form 20/21); Notification 9/2025 and 10/2025-Central Tax (Rate). Figures are indicative ranges — verify current fees and rates with your State Drugs Control Department and a GST professional before investing. Last reviewed October 2026.