India cuts drug, medical device taxes with Sep. 22 deadline. How to calculate GST on medicine, How much GST on medicine in India.
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India cuts drug, medical device taxes with Sep. 22 deadline
Big changes are coming to the cost of medicines and medical devices in India, and it’s good news for consumers.
Following recent decisions made by the GST Council, the National Pharmaceutical Pricing Authority (NPPA) has told drug and medical device companies to quickly pass on the benefits of reduced GST rates to customers. These new prices must take effect from September 22.
What’s changing? Most medicines will now have a GST rate of 5%, down from 12%. Even better, 36 critical drugs used to treat cancer, rare diseases, and chronic conditions will be completely exempt from GST.
It’s not just medicines—medical devices like glucometers, thermometers, diagnostic kits, and spectacles will also see a major drop. These items, which earlier attracted 12% or 18% GST, will now be taxed at just 5%.
To make sure companies follow the new rules, the NPPA has asked them to share revised price lists with dealers, retailers, and government authorities by September 22. They’ve also been told to spread the word through all available channels—print, digital, and social media.
Thankfully, manufacturers won’t have to recall or relabel existing products already in the market. Instead, they can update prices at the retail level through new price lists and communication. This move has been welcomed by industry groups, as it avoids wastage and unnecessary costs.
Small and medium businesses have also been given some breathing room—they can use existing packaging materials until the end of 2025.
This overhaul is part of a larger shift in India’s tax structure, which is now moving toward two main GST rates: 5% and 18%. The goal is simple: make healthcare more affordable and accessible for everyone.
So if you or your family use regular medicines or medical devices, you can expect some relief very soon.
