GST Rates On Medicines: GST Council Slashes Rates On Key Lifesaving, Cancer Medicines

The Goods and Services Tax (GST) Council rolled out sweeping changes in healthcare taxation at its 56th meeting. Union Minister of Finance Nirmala Sitharaman announced that starting from September 22, 2025, a total of 33 lifesaving drugs will be exempted from the ambit of GST. Three other critical medicines used for cancer and rare diseases have also been exempted. Additionally, the tax on most other medicines has been reduced from 12 per cent to 5 per cent, and rates on several diagnostic kits and medical devices have also been lowered.

The GST Council said the changes are meant to bring down costs at the pharmacy counter and in hospital procurement, easing the financial strain of long treatments like chemotherapy, according to a report by NDTV.

How Patients Gain

For families struggling with treatment bills, this comes across as a huge relief. Previously, a drug with a base price of Rs 1 lakh would cost Rs 1.12 lakh after addition of GST. Now, the same drug would be available for Rs 1 lakh after the exemption. For a patient on repeated cycles of such medicines, the savings can be a lot. Even routine prescriptions, which will now attract only five per cent GST, will mean more saving for the buyer or patient.

The exemption list includes advanced cancer therapies, orphan drugs for rare genetic disorders, and other high-cost biologics. These are treatments that often push families into debt. A lighter tax burden could soften that blow. Doctors say that lower prices could also improve compliance, as patients are more likely to complete expensive courses of therapy if the bills look less intimidating. Hospitals, too, may be able to expand access to advanced treatments once procurement costs fall.

What To Watch Out For

Price tags, though, may not change overnight. Many manufacturers print Maximum Retail Prices (MRPs) inclusive of GST, which means fresh labels and revised bills will take time to appear. Some companies could also hold back part of the benefit in margins. Regulators will need to keep an eye on how much of the tax cut actually reaches patients.

Still, the signal is clear: tax policy is being used to make healthcare more affordable and accessible to a large section of the population. If the new rates are implemented smoothly, patients may finally see some breathing space in their medical budgets. For households caught between medical emergencies and rising living costs, even small reductions can feel like a lifeline.