GST Rate On Life-Saving Drugs And Other Pharma

  • By Jainey Sheth, Communications, RetailerShakti.
  • April 14, 2023

The implementation of GST on the pharmaceutical industry and the supply of medicines across India has led to four tax rates being applied on the same, i.e, Nil 5%, 12 %, and 18 % respectively applied to human blood and derivations from it along with all kinds of contraceptives. The highest rate of GST applied to medicine is 18%. This percentage is applied to those medicines that consist of nicotine gum.

The GST can go as low as 5% which is applied to pharmaceutical products deemed mainly as ‘life-saving drugs’ which include oral rehydration salts, vaccines, and all those medicines that are used in treating diseases like HIV-AIDS, diabetes, Malaria, and so on. There are no pharmaceutical medicines that are enlisted under the GST rate of 28%.

The following are the categorizations -

5% GST on medicines and other medical supplies

The lowest GST rate of GST is applied to the following medicines and medical supplies:

  • Animal/Human blood vaccines
  • Diagnostic kits for detecting all kinds of hepatitis
  • Cyclosporine
  • Oral rehydration salts
  • Insulin
  • Medicaments (this includes veterinary medicines) without the name of the brand used in the bio-chemical medical system
  • Deferoxamine or deferiprone injection
  • Drugs or medicines as well as their salts and esters along with diagnostic test kits (made specific in List 1 of central excise notification 12/2012).
  • Manufactured formulations from the bulk drugs as specified in List 2 of central excise notification 12/2012.
  •   Siddha, Ayurvedic, Unani, Bio-chemic, or Homeopathic medicines produced in accordance with the formulations recommended in an appropriate pharmacopeia/First Schedule of the Drugs and Cosmetics Act, 1940.
  • Artificial kidneys, along with disposable micro barriers and sterilized artificial kidney dialyzers.
  • Wheelchairs, artificial limbs, walking frames, crutches, and so on.
  • Stent system or coronary stents for use with cardiac catheters.

18% GST on Pharmaceutical preparations

  • Pharmaceutical products are subject to the highest GST rate of 18%. This section contains only a few medical items.
  • Nicotine Polacrilex Gum
  • The individual retail packaging of dental/oral hygiene preparations such as denture powders and dental floss, fixative pastes, and so on (excluding toothpowder)
  • A number of hair care products (except mehndi pates available in cones)
  • Dental, medical, surgical, or veterinary furniture such as operating tables, hospital beds, examination tables, etc.

NIL GST on Medical Services

GST Act, 2017 consists of provisions for the health services of both humans and animals which clearly states that the services of medical practitioners, paramedical clinics, or licensed medical will be imposed a GST at the NIL rate and it will be applied for ambulance services for transportation of any patient. The same rate of GST will be applied to veterinary services and treatments.