Government Cuts GST on Medicines and Medical Devices, Prices to Get Cheaper from September 22, 2025

The Indian government has announced significant cuts in the GST rates for medicines, medical devices, and healthcare products, effective from September 22, 2025. The National Pharmaceutical Pricing Authority has directed all pharmaceutical companies to update the Maximum Retail Price (MRP) of medicines and medical devices to reflect the new GST rates, ensuring customers and patients benefit from the reduction.

In a notification by the Ministry of Chemicals and Fertilizers, it was stated that no relabeling or re-sticking of existing stock is necessary as long as price compliance at the retail level is maintained. The government has also encouraged industry associations to spread awareness about the new GST rates through advertisements in local and national media.

The 56th GST Council meeting held on September 3, 2025, recommended lowering the GST rate on major medicines from 5% to zero. Around 33 generic, life-saving medicines have become tax-free under this new system. Other medicines are now taxed at 5%, down from 12%. Medical devices such as wadding, gauze, bandages, dental and surgical instruments have had their GST rates reduced from 12% or 18% to 5%.

Additionally, common healthcare and personal care products such as talcum powder, hair oil, shampoo, dental floss, toothpaste, and soaps have seen their GST rates slashed from 18% to 5%. This reform aims to improve the affordability and accessibility of essential healthcare products and boost domestic pharmaceutical and medical device manufacturing.

Industry experts believe this reduction will not only ease the financial burden on consumers but also promote equitable healthcare access across the country. The shift is expected to positively impact patients, hospitals, and the overall health sector by making critical treatments and medical equipment more affordable.