New Delhi, Sep 4 (UNI) Industry bodies, health experts and patient advocacy groups today welcomed the union Government’s decision to reduce Goods and Services Tax (GST) on a range of life-saving drugs and medical products, calling it a “progressive reform” that will help reduce treatment costs and improve access to critical healthcare services.
The GST Council, chaired by union Finance Minister Nirmala Sitharaman, announced the tax cuts after its meeting yesterday. The revised structure, effective from September 22, brings down GST on 33 cancer and rare disease drugs from 12 per cent to zero.
“GST on 33 life-saving drugs and medicines has come down from 12 per cent to zero,” Sitharaman said during a media briefing after the meeting. Three additional life-saving medicines, previously taxed at 5 per cent, have also been made tax-exempt. Hailing the move, Ameera Shah, President of NATHEALTH, said “This is a timely and progressive step. With rising incidences of cancer and rare diseases, the removal of GST on essential medicines will improve affordability and support early diagnosis and intervention. Standardising GST rates across healthcare products also enhances transparency and system-wide consistency.”
The Council has also reduced GST on several essential medical supplies, including devices and diagnostic tools. GST on vision-correcting spectacles and goggles has been slashed from 28 per cent to 5 per cent. Similarly, GST on medical consumables such as bandages, gauze, diagnostic kits, reagents and blood glucose monitors has been brought down from 12 per cent to 5 per cent. A similar rate cut has been applied to a wide range of medical, surgical, dental, and veterinary instruments, previously taxed at 18 per cent.
Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD), welcomed the rate reduction but flagged concerns over its implementation: “While the decision to lower GST is commendable and consumer-friendly, the industry needs timely refunds for accumulated input tax credit to avoid an inverted duty structure. A reasonable transition period must also be allowed for updating packaging and MRP, to prevent allegations of profiteering.”
In a further boost to healthcare affordability, the Council has removed GST on individual health and life insurance premiums, which were previously taxed at 18 per cent. “The move will make insurance more affordable for the common man and help expand coverage across the country,” the Finance Minister said.
Dr. Nita Radhakrishnan, Additional Professor and Head, Department of Pediatric Hematology Oncology, Post Graduate Institute of Child Health, Noida also welcomed the decision to exempt critical drugs from GST. “In pediatric oncology and bone marrow transplant care, many of the newly exempted medicines are essential. This step will greatly reduce the financial burden on families and enable more timely and effective treatment for children with blood disorders and cancers.”
Dr Khyatee, senior physiotherapist and former research officer at AIIMS, looked beyond just the medication. She said lower cancer drug prices ease financial stress, allowing patients to focus on recovery rather than costs. “This improves treatment adherence and overall outcomes. With fewer financial barriers, patients can access supportive therapies like physiotherapy, nutrition counseling, and mental health care—crucial for managing side effects, boosting energy, and improving emotional well-being,” said Dr Khyatee who is also director at Pratyaksh Medical Care noted.
DS Negi, CEO, RGCIRC (Rajiv Gandhi Cancer Institute & Research Centre) too agreed as he said, “ Healthcare is not only about medicine, but also about dignity, equity, and hope. The government’s step to reduce GST on insurance and cancer drugs is more than financial relief; it is a reaffirmation that the health of citizens is a national priority.
“In a country where cancer devastates both body and household, this reform restores balance by easing financial toxicity and enabling access to care at the right time.”
Industry leaders also noted the positive economic implications. Harsha Vardhan Agarwal, President, FICCI, said “The reduction of GST on life-saving drugs to zero or 5 per cent will significantly reduce treatment costs, enhance patient access, and strengthen India’s position as a global supplier of affordable healthcare.”
At the same time, the GST Council retained high tax rates on products deemed injurious to health. Items such as pan masala, gutkha, cigarettes, and other tobacco products will continue to attract the existing GST and compensation cess structure until all pending cess-linked borrowings are cleared.
In contrast, GST on sweetened and flavoured beverages, including aerated drinks, has been increased from 28 per cent to 40 per cent in a bid to curb rising sugar-related health concerns. The latest reforms are in line with Prime Minister Narendra Modi’s Independence Day commitment to make healthcare more affordable and accessible.
