The policy is expected to make chronic illness treatments—such as diabetes, hypertension, and cancer—more affordable, while also benefiting hospitals, patients, and the pharmaceutical and medical-device industries.
New Delhi: With GST reduced to 5% on all medications and medical equipment, such as thermometers and glucometers, among others, medicine bills are expected to decline.
In a major move to make healthcare more affordable, the GST Council, chaired by Finance Minister Nirmala Sitharaman, announced a sweeping rationalisation of GST rates in its 56th meeting.
Key highlights of the decision:
- Lifesaving drugs: GST reduced from 12% to nil on 33 lifesaving drugs, and from 5% to nil on 3 critical drugs for cancer, rare diseases, and severe chronic illnesses.
- Other medicines: GST brought down from 12% to 5%.
- Medical devices & diagnostic kits: Rates cut to 5%, covering items like glucometers, thermometers, anesthetics, medical-grade oxygen, gauze, bandages, surgical gloves, diagnostic kits, and other appliances.
- Optical products: GST on spectacles, lenses, and contact lenses reduced from 12% to 5%.
- Pharma manufacturing: Job-work GST reduced from 12% to 5%.
The changes, effective 22 September 2025, aim to reduce out-of-pocket expenses, increase access to advanced therapies, and ease the financial burden on families undergoing long-term treatments such as chemotherapy.
According to the Health Ministry, the policy is expected to make chronic illness treatments—such as diabetes, hypertension, and cancer—more affordable, while also benefiting hospitals, patients, and the pharmaceutical and medical-device industries.
How it Impact on Patients:
The move will directly reduce out-of-pocket expenses for patients. For example, a drug priced at INR 1,00,000 previously carried 12% GST (totaling INR 1,12,000). With the GST reduction to zero, patients will now pay INR 1,00,000—saving the entire tax amount. This is particularly meaningful for those undergoing long-term treatments such as chemotherapy, diabetes, or hypertension therapies.
While this GST reduction offers significant relief, actual prices of drugs and medical equipment will still depend on broader market and industry factors.
