Thirty six lifesaving medicines, many of which carrying price tags of over ₹1 lakh a dose, will attract zero tax due to the landmark rate rationalisation decision made by the Goods and Services Tax (GST) Council on September 3.

The medicines include cholesterol drug Inclisiran, cancer drugs Teclistamab, Atezolizumab and Daratumumab, multiple sclerosis drug Mepolizumab, etc.

While the Council has cut the tax on 33 drugs from 12% to nil, three other medicines were attracting 5% before it was brought into the zero tax category. Patients suffering from illnesses like cancer, rare diseases and other severe chronic diseases are expected to benefit.

The Council also reduced GST on all other drugs and medicines from 12% to 5%.

Commenting on the development, Sudarshan Jain, Secretary General, Indian Pharmaceutical Alliance (IPA) said the decision to exempt life-saving and cancer medicines from GST will bring direct relief to patients and their families. Equally, the reduction in GST on a wide range of medicines from 12% to 5% will help ease the overall treatment burden and make essential therapies more affordable, he said.

The Council had also brought down the tax on all medical devices also to 5%. While reduction of GST was from 18% to 5% on various medical apparatus and devices used for medical, surgical, dental or veterinary usage or for physical or chemical analysis, various medical equipment and supplies devices such as wadding gauze, bandages, diagnostic kits and reagents, blood glucose monitoring system (Glucometer) medical devices, etc will see GST coming down from 12% to 5%.

“We welcome the Government’s landmark decision to reduce GST from 12% to 5% on a wide range of medical products, including diagnostic kits, reagents, surgical apparatus and other critical Medtech products. This progressive reform will directly benefit patients by lowering treatment costs, improving affordability, and expanding access to essential medical technologies. It is a transformative step that will strengthen India’s healthcare system and advance the vision of affordable healthcare for all," Himanshu Baid, managing director, Poly Medicure, said.

Meanwhile, the Central Board of Indirect Taxes and Customs has explained that the reason for maintaining most drugs and medicines in the 5% tax bracket is also citizen centric. “if drugs/ medicines are fully exempted, the manufacturers/dealers would not be able to claim input tax credit on GST paid on raw materials and will have to reverse the ITC paid on the inputs. This would increase their effective tax incidence and cost of production. This may in turn be passed on to consumers/ patients in the form of higher prices which in turn would make the measure counterproductive”, the Board has said.