GST on Medicines in India —
5%, Nil or Exempt?
The current GST rate on medicines, life-saving drugs, medical devices, Ayurvedic products and hospital services after the GST 2.0 rate cuts effective 22 September 2025.
Under GST 2.0 (effective 22 September 2025), most medicines are taxed at 5% — reduced from the earlier 12%. A notified list of 36 life-saving drugs for cancer and rare diseases is now Nil (fully exempt). Medical devices and apparatus largely moved to 5%, and hospital, diagnostic and ambulance services stay exempt.
GST Rate on Medicines & Medical Products — Decision Table
The current post-22-September-2025 GST rate for every common pharma, device and healthcare category, with the applicable HSN / SAC family.
| Category / Product | GST Rate | ITC | Notes |
|---|---|---|---|
| Most medicines (tablets, capsules, syrups, injections) | 5% | Yes | HSN 3003/3004 · cut from 12% |
| Notified life-saving drugs (cancer, rare disease) | Nil | No | 36 drugs exempted under GST 2.0 |
| Insulin | 5% | Yes | Essential medicine |
| Vaccines (COVID, BCG, polio, hepatitis) | 5% | Yes | Life-saving category |
| Oral rehydration salts (ORS) | 5% | Yes | Essential formulation |
| Ayurvedic / Unani / Homoeopathic medicaments | 5% | Yes | HSN 3003/3004 · cut from 12% |
| Medical devices & apparatus (BP, glucometer, thermometer) | 5% | Yes | Cut from 18%/12% to 5% |
| Wheelchairs, crutches, hearing aids, orthopaedic aids | 5% | Yes | Assistive devices |
| Diagnostic kits, syringes & needles | 5% | Yes | — |
| Blood & blood products | Nil | — | Exempt |
| Contraceptives (condoms, pills) | Nil | — | Exempt |
| Sanitary napkins | Nil | — | Exempt since Jul 2018 |
| Hospital / clinical services (OPD, IPD, ICU, surgery) | Exempt | No | Notf. 12/2017-CT(R) |
| Diagnostic services (blood test, MRI, X-ray) | Exempt | No | By clinical establishments |
| Ambulance services | Exempt | — | Emergency transport |
| Cosmetic / elective aesthetic surgery | 18% | Yes | Not medically necessary |
Rates reflect the GST 2.0 two-slab structure effective 22 September 2025 (56th GST Council). Confirm the exact HSN and rate on the official GST portal before invoicing.
5% Medicine vs Nil-Rated Drug
For almost every pharmacy sale the answer is 5%. The Nil rate applies only to a specific notified list of life-saving drugs (mainly cancer and rare-disease therapies) — not to ordinary prescription medicines.
Most medicines & devices — with ITC
- Tablets, capsules, syrups, injections
- Insulin, vaccines, ORS
- Ayurvedic & homoeopathic medicaments
- BP monitors, glucometers, thermometers
- Wheelchairs, hearing aids, syringes
- Full input tax credit available to sellers
Exempt — no GST charged
- 36 notified life-saving drugs (cancer, rare disease)
- Blood & blood products
- Contraceptives & sanitary napkins
- Hospital, diagnostic & ambulance services
- No GST on the invoice
- Seller cannot claim ITC on exempt supplies
Not sure whether your product is 5%, Nil or 18%?
Get My GST Rate →GST on Medical Devices After GST 2.0
Medical devices saw one of the largest cuts. Apparatus used for medical, surgical, dental or diagnostic purposes — earlier taxed at 12% or 18% — was moved to 5% to make treatment cheaper.
- BP monitors, glucometers, thermometers and diagnostic apparatus: now 5% (earlier 12%/18%).
- Wheelchairs, crutches, hearing aids and other assistive aids: 5%.
- Sellers registered under GST can claim input tax credit on device purchases; hospitals making exempt supplies cannot.
How GST Adds Up — ₹1,000 Medicine Bill
5% Standard medicine
Nil Life-saving drug
Before GST 2.0 the same ₹1,000 medicine at 12% carried ₹120 GST (a ₹1,120 bill). The cut to 5% lowers the tax on most medicines by more than half. Use our GST calculator to check any value.
Manufacturers were not required to recall or re-label medicines already in the market before 22 September 2025. So you may still see stock printed at the old 12%-inclusive MRP — the reduced 5% rate applies on fresh supplies, and retailers must pass on the benefit.
Run a pharmacy or pharma distribution? Get your rate classification and returns handled.
Get Pharmacy GST Advice →Why Hospital Services Are GST-Exempt
Under Notification 12/2017 — Central Tax (Rate), healthcare services supplied by a clinical establishment, an authorised medical practitioner or a paramedic are fully exempt. This covers OPD, in-patient treatment, surgery, ICU, ambulance and diagnostic tests.
Stays exempt (Nil)
- Consultation & OPD charges
- Hospitalisation, surgery & ICU
- Diagnostic tests by a clinical establishment
- Medicines dispensed to admitted in-patients
- Ambulance services
Taxable inside a hospital
- Cosmetic / elective aesthetic surgery — 18%
- Canteen / food supplied separately
- Room rent above notified limits, where applicable
- Pharmacy retail sales to walk-in patients (5%)
- Parking and other non-clinical services
Because hospitals make exempt supplies, they cannot claim ITC on the medicines, devices and construction they buy. The GST 2.0 cuts to 5% (and Nil on life-saving drugs) directly reduce that embedded, unrecoverable input cost — which is exactly why the Council targeted health items.
Running a hospital, clinic or diagnostic lab? Get your exempt/taxable split right.
Talk to a GST Expert →Medicine GST Compliance Checklist
Retail pharmacies and medical stores register under GST and charge the applicable rate (mostly 5%) on sales, claiming ITC on purchases from distributors. Here is the working compliance picture:
- GST registration (GSTIN)
- Correct rate classification (Nil / 5% / 18%)
- Product-wise HSN on every invoice
- ITC on purchases from wholesalers
- Reverse ITC on free samples · 17(5)(h)
- GSTR-1 (outward supplies)
- GSTR-3B (monthly / quarterly)
- GSTR-2B / ITC reconciliation
- E-invoicing applicability
- E-way bill where relevant
- GSTR-9 annual return
- Pass-on of GST 2.0 rate cut to buyers
Medical representatives and pharma companies distributing free physician samples must reverse ITC under Section 17(5)(h) — gifts and free supplies are a blocked-credit situation, a common audit trigger for pharma.
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