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GST on Medicines and Medical Supplies in India

Impact of GST on Medicine Prices

Goods and Services Tax in India has taxed at four separate rates NIL, 5%, 12% and 18% on medicines and medical supplies. NIL rate is charged on blood and its by-products, and all contraceptives. The lowest GST rate of 5 % is charged on life-saving drugs like vaccines and medicines like those for tuberculosis, AIDS, diabetes, malaria among others. The highest GST at the rate of 18% is charged only on medicines, like nicotine gums, which contain nicotine polacrilex. Although GST is charged at the rate of 28% on some other products and services under GST but the rate is not charged on any medicines or medical supplies.

Latest Update in Medicines & Medical

12th July 2023

09th December 2022

18th July 2022

29th June 2022

CAIT Asks Attention on Online e-Pharmacy

The Confederation of All India Traders (CAIT) has once again tried to comprehend the harm of online selling concerned with the retailers of chemists and pharmacy. The CAIT has asked the Piyush goyal Hon’ble Minister for Commerce, to look out for the online e-commerce portals that are doing online pharmacy and giving tough competition to the retailers. Huge discounting is doing much harm to the retailers and this has to be studied with proper caution on the note of the wellness of chemists. Read PDF

1 . NIL Rate of GST on Medicines and other Medical Supplies

2 . 5% Rate of GST on Medicines and other Medical Supplies

The products and medical supplies on which GST at the rate of 5% is charged are:-

Many other medicines and supplies are charged GST at the rate of 5% instead of those stated in the list.

Read Also:- GST Impact on Healthcare Industry in India Check out the brief details of GST impact on the healthcare industry in India. The researchers have commented on the impact of GST regime. Read More

3.  12% Rate of GST on Medicines and other Medical Supplies

The products and medical supplies on which GST at the rate of 12% is charged are:-

Many other medicines and supplies are charged GST at the rate of 12% instead of those stated in the list.

4. 18% Rate of GST on Medicines and other Medical Supplies

The products and medical supplies on which GST at the rate of 18% is charged are:-

Many other medicines and supplies are charged GST at the rate of 18% instead of those stated in the list.

NIL GST on Medical Services

GST Act, 2017 contains the provisions for the health services for humans and veterinary (animals) both, which states that the services of medical practitioner, licensed medical or paramedical clinic will be charged a GST at NIL rate and will be applied for the services of ambulance for transportation of a patient. The same rate will be applicable on veterinary treatments and services. 

Read Also:- GST Impact on Expired Medicine/Drugs Return Know the GST (Goods & Services Tax) impact on expired medicine drugs return in India. Also, we have published important conditions & consequences. Read More

NIL GST on Hospitalisation

The Authority of Advance Ruling (AAR) in Kerala ordered that GST at the rate on NIL percent will be charged on the medicines and medical supplies, implants and other related tasks at the time of hospitalisation of any individual. AAR said that NIL rate will be applicable as these medicines and supplies were a part of healthcare service provided during hospitalisation. The ruling is applicable to all hospitals and clinics across the country. 

Impact of GST on Medicines and Medical Supplies

The introduction of GST in the place of Value Added Tax (VAT) has removed the cascading of tax on different levels of production and supply of medicines and medical supplies of all kinds. The GST is imposed on medicines in such a way that the prices have remained unchanged in most of the cases. For dietary products, the excise duty is removed and taxes are reduced for the benefit for the consumers. 

The pharmaceutical companies had to warehouse the supplies as a VAT at the rate of 2% was charged for the inter state supplies but with the introduction of GST, the warehousing cost is reduced as benefit of Input Tax Credit is provided and rate of GST is also same throughout all the states. This is the main impact of GST. 

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