New Delhi: In a landmark decision to make healthcare more affordable for millions of Indians, especially patients battling long-term and critical illnesses, the GST Council late Wednesday announced slashing of consumer tax rates on medicines and medical equipment.
The council, headed by Union finance minister Nirmala Sitaraman, announced the removal of the goods and services tax (GST) from the current 12% on 33 life-saving drugs that are used to treat critical illnesses such as cancer and some other rare diseases. Additionally, three other vital life-saving drugs were made tax-exempt, from a 5% GST rate earlier.
GST is removed on Onasemnogene abeparvovec, Asciminib, Mepolizumab, Pegylated Liposomal Irinotecan, Daratumumab, Daratumumab subcutaneous, Teclistamab, Amivantamab, Alectinib, Risdiplam, Obinutuzumab, Polatuzumab vedotin, Entrectinib, Atezolizumab, Spesolimab, Velaglucerase Alpha, Agalsidase Alfa, Rurioctocog Alpha Pegol, Idursulphatase, Alglucosidase Alfa, Laronidase, Olipudase Alfa, Tepotinib, Avelumab, Emicizumab, Belumosudil, Miglustat, Velmanase Alfa, Alirocumab, Evolocumab, Cystamine Bitartrate, CI-Inhibitor injection, Inclisiran, Agalsidase Beta, Imiglucerase and Eptacog alfa activated recombinant coagulation factor VIIa.
Tax benefits have also been extended to a broad spectrum of healthcare products. The GST on all other drugs and medicines has been reduced from 12% to a more affordable 5% for all drugs including Fluticasone Furoate + Umeclidinium + Vilanterol FF/UMEC/VI, Brentuximab Vedotin, Ocrelizumab, Pertuzumab + trastuzumab and Faricimab.
An array of medical devices and supplies, including surgical equipment, dental apparatus, diagnostic kits, and common items like glucometers and bandages, will now attract a GST rate of just 5% from the earlier rates of 12% and 18%.
The new tax rates will come into effect on 22 September, the first day of the Navratri festival.
The lowering of the indirect tax rates aims to lower the cost of diagnostic tests and day-to-day medical supplies, making preventive and routine healthcare more accessible to the common person.
Rajiv Nath, from the Association of Indian Medical Device Industry (AiMeD), welcomed the tax cuts but pointed to potential challenges. While the rate reduction is a welcome move for consumers, the industry hopes for a speedy refund of accumulated GST on raw materials and services to prevent an “inverted GST structure,” where the tax on inputs was higher than on finished products, he said.
Nath also urged for a transition period to adjust packaging and pricing in the sector without any fear of “profiteering” accusations, assuring that the industry was committed to passing on the full benefits to consumers.
Ameera Shah, president of NATHEALTH, an umbrella organization of India’s healthcare stakeholders that works with policymakers, described the duty cuts as a progressive reform and said the higher affordability will enhance access to quality healthcare services and support early disease detection. Standardizing GST rates across healthcare products will also bring greater consistency to the system, she added.
Himanshu Baid, managing director of Poly Medicure Ltd, echoed the view and said the government’s move will directly benefit patients by lowering treatment costs and expanding access to essential medical technologies.
