In its 56th meeting the GST Council, chaired by Finance Minister Nirmala Sitharaman, announced a sweeping rationalisation of GST rates with the explicit goal of easing costs for households and patients. Among the headline measures in what comes across as a major boost to public health, the Council recommended reduction of GST from 12% to nil on 33 lifesaving drugs, and from 5% to nil on 3 critical drugs used for cancer, rare diseases and other severe chronic illnesses. More broadly, GST on "all other drugs and medicines" has been brought down from 12% to 5%, while many medical devices and diagnostic kits see rates fall (typically to 5%). The GST Council set the implementation date for services and most goods as 22 September 2025, with operational details and FAQs to be issued by the government.
This policy is explicitly positioned as a public-health affordability measure: by removing the tax layer on some of the costliest therapies and cutting rates across the pharmaceutical and medical-device value chain, the Council aims to reduce out-of-pocket spending, increase access to advanced therapies, and ease the burden on families undergoing long treatments such as chemotherapy. The decision has been widely reported across national and international media and is expected to have immediate and medium-term effects on patient bills, hospital procurement, and industry pricing and margins.
What Patients Will Actually Save
When a drug moves from 12% GST to 0%, the GST component previously added to the sale price is removed. In practical terms, if a drug's pre-GST price is INR1,00,000 and 12% GST was applied earlier, the consumer paid INR1,12,000; after the change they should pay roughly INR1,00,000, which is basically a direct saving equal to the tax. The Council's change therefore reduces the tax wedge on high-cost therapies and will be meaningful for patients on long or repeated courses of treatment.
(Retail MRP practice may vary: many MRPs are tax-inclusive; sellers and manufacturers must revise price displays and bills.)
Complete List Of The 33 Lifesaving Drugs
Here's a list of lifesaving drugs that the GST Council/PIB Annexure have announced will have major GST cuts from September 22. The list has been reproduced verbatim for readers, and any changes will be based on implementation and other factors.
- Agalsidase Beta
- Imiglucerase
- Eptacog alfa (activated recombinant coagulation factor VIIa)
Onasemnogene abeparvovec; Asciminib; Mepolizumab; Pegylated Liposomal Irinotecan; Daratumumab (including subcutaneous); Teclistamab; Amivantamab; Alectinib; Risdiplam; Obinutuzumab; Polatuzumab vedotin; Entrectinib; Atezolizumab; Spesolimab; Velaglucerase Alpha; Agalsidase Alfa; Rurioctocog Alpha Pegol; Idursulphatase; Alglucosidase Alfa; Laronidase; Olipudase Alfa; Tepotinib; Avelumab; Emicizumab; Belumosudil; Miglustat; Velmanase Alfa; Alirocumab; Evolocumab; Cystamine Bitartrate; CI-Inhibitor injection; Inclisiran. (See PIB annexure for exact HSN mappings and the authoritative list.)
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What This List Means In Practice
- High-cost biologics and specialised orphan drugs figure prominently in the GST Council's list of drugs. For patients on such therapies, tax elimination can reduce per-dose costs by the tax percentage, producing substantial cumulative savings across treatment cycles.
- Most other medicines now attract 5% GST (down from 12%), so this is a broader relief for routine prescriptions, diabetic supplies, and many packaged medicaments. This move is likely to reduce the average pharmacy bill for a household.
What To Watch: Possible Caveats People Should Know
While the GST Council's announcement comes as a welcome relief for patients and households, prices of drugs and even medical equipment are subject to a lot of other market and industry factors. So, here are some caveats all patients and consumers should be aware of.
- MRP vs invoice pricing: Some manufacturers sell at MRPs that already include GST. Removing GST requires manufacturers/retailers to revise MRPs or show the tax line separately. The extent and speed of visible retail price cuts will depend on how quickly producers change MRPs and retailers pass savings to customers.
- Manufacturer and distributor behaviour: Firms may rework pricing, absorb some savings into margins, or reprice products. Regulators (NPPA where price controls apply) and DGFT/CBIC communications will matter for enforcement.
- Insurance and reimbursement: For insured patients, lower billed prices can reduce co-payments and claims costs. Public procurement (government hospitals) will also benefit in procurement budgets.
- Accessibility vs availability: Tax relief reduces cost but does not instantly increase drug availability, supply chains, production capacity and tendering processes remain critical.
- Implementation details: Consumers should look for official CBIC notifications and insurer/seller advisories to confirm effective billing dates, invoice changes, and treatment-specific clarifications. The Council recommended an implementation date of 22 September 2025 for most changes.
Wider Implications
Beyond individual savings, the measure is likely to ease catastrophic health expenditure for many families, improve uptake of expensive but curative/long-term therapies, and reduce the economic barrier to advanced care. It also signals a policy tilt where social priorities (health affordability) inform tax design, but success depends on transparent implementation and industry compliance.
The GST Council's move to zero GST on 33 lifesaving drugs and selected cancer/rare-disease medicines, alongside rate cuts across medicines and medical devices, is a significant affordability measure. Paired with the earlier 0% GST on individual health and life insurance, these fiscal steps together lower both the direct cost of treatment and the cost of risk protection for Indian households, a two-pronged approach to reduce out-of-pocket health expenditure. The real gains for patients will depend on rapid, transparent implementation by manufacturers, suppliers, pharmacies, hospitals and insurers.
Disclaimer: This content including advice provides generic information only. It is in no way a substitute for a qualified medical opinion. Always consult a specialist or your own doctor for more information. NDTV does not claim responsibility for this information.
References
PIB - Recommendations of the 56th Meeting of the GST Council (Press Release & Annexures).
PIB FAQ/clarifications snippet - coverage of all individual life and all individual health policies and reinsurance thereof.
GST Council website - meeting notice/updates; CBIC notifications will be placed in due course.
