GST on Medicines & Pharmaceutical Products — Rates 2025
Updated: 3 June 2026 | GST Council | CGST Act 2017
Most medicines in India attract 12% GST. Life-saving drugs — insulin, vaccines, anti-cancer, and anti-malarial drugs — are taxed at the concessional rate of 5%. Contraceptives and condoms are exempt (0%). Hospitals providing medicines as part of in-patient treatment are exempt. Standalone pharmacies charge GST at applicable rates.
5%
GST on Life-Saving Drugs
Insulin, human vaccines, anti-cancer drugs (e.g., Imatinib), anti-malaria drugs, and coronary stents attract only 5% GST — reduced to protect patient affordability for critical therapies.
Insulin, human vaccines, anti-cancer drugs (e.g., Imatinib), anti-malaria drugs, and coronary stents attract only 5% GST — reduced to protect patient affordability for critical therapies.
GST Rates on Medicine Categories — Complete Table
GST on pharmaceutical products is determined by the HSN code and product category as notified under CGST (Rate) notifications. The table below covers all major categories:
| Product / Category | GST Rate | HSN Code | Notes |
|---|---|---|---|
| Insulin (all forms) | 5% | 3004 | Life-saving drug exemption |
| Human vaccines (all types) | 5% | 3002 | Includes COVID vaccines, Hepatitis-B, Polio |
| Anti-cancer drugs | 5% | 3004 | Notified life-saving drugs — verify specific drug |
| Anti-malarial drugs | 5% | 3004 | Chloroquine, Hydroxychloroquine, etc. |
| Coronary stents & orthopedic implants | 5% | 9021 | Medical devices category |
| General medicines & pharmaceutical preparations | 12% | 3003 / 3004 | Majority of OTC and prescription drugs |
| Branded Ayurvedic / Unani / Homeopathic medicines | 12% | 3003 / 3004 | Branded = has registered trademark |
| Unbranded Ayurvedic formulations | 0% | 3003 | No brand name / trademark |
| Diagnostic test kits (clinical) | 12% | 3822 | Blood glucose kits, pregnancy test kits, etc. |
| Sanitizers / hand rubs | 18% | 3808 / 3402 | Was reduced to 0% during COVID peak; reverted to 18% |
| Contraceptives / condoms | 0% | 4014 | Fully exempt |
| Oral contraceptive pills | 0% | 3006 | Exempt — notified contraceptives |
| Blood bags / dialysis equipment | 12% | 9018 | Medical equipment category |
| Nebulisers & oxygen concentrators | 12% | 9019 | Was temporarily reduced during COVID to 5% |
Rates are indicative based on CGST Rate notifications. Verify against latest GST Council notifications before invoicing. HSN codes may differ for combination drugs.
ITC Chain in Pharma — Manufacturer to Pharmacy
A registered pharmacy or distributor can claim full Input Tax Credit on medicines purchased from the supply chain. Here is how the ITC chain works:
| Supply Chain Entity | GST Paid on Purchases | GST Collected on Sales | Can Claim ITC? | Net GST Liability |
|---|---|---|---|---|
| Pharmaceutical Manufacturer | 5%/12% on inputs | 5%/12% on drugs sold | Yes | Output GST minus ITC on inputs |
| C&F Agent / Distributor | 5%/12% from manufacturer | 5%/12% to retailer | Yes | Typically low (margin-based) |
| Retail Pharmacy (Regular Scheme) | 5%/12% from distributor | 5%/12% charged to customer | Yes | Output GST minus ITC on purchases |
| Retail Pharmacy (Composition Scheme) | 5%/12% from distributor | 1% flat (composition levy) | No — ITC blocked | 1% on turnover; no ITC benefit |
| Hospital (in-patient treatment) | 5%/12% on medicines | Exempt (healthcare service) | No — exempt supply blocks ITC | Cost of input tax becomes expense |
Composition Scheme for Pharmacies: A pharmacy with annual turnover up to ₹75 lakh may opt for the composition scheme and pay GST at 1% of turnover. The advantage is simplified compliance (quarterly returns instead of monthly). The disadvantage is loss of ITC — all input tax on medicine purchases becomes a cost, making it unviable for high-volume pharmacies with thin margins.
Frequently Asked Questions
What is the GST rate on common medicines in India?
Most general medicines and pharmaceutical products attract 12% GST. Life-saving drugs get concessional rates: insulin, vaccines (human), anti-cancer drugs, and anti-malarial drugs attract 5% GST. Some critical items are exempt: condoms and contraceptives are at 0% GST. OTC medicines available at retail pharmacies typically fall in the 12% bracket. Always verify the HSN code of the specific drug to confirm the applicable rate, as the GST Council periodically revises rates.
What is the GST rate on Ayurvedic medicines?
Branded Ayurvedic, Unani, and Homeopathic medicines attract 12% GST. Unbranded (non-proprietary) Ayurvedic formulations — those without a brand name or trademark — are exempt (0% GST). The distinction is brand-vs-unbranded: a medicine sold under a registered brand name pays 12% even if it is an Ayurvedic formulation. The HSN code for Ayurvedic medicaments is typically 3003/3004. Verify whether the product is branded before invoicing.
Can a pharmacy claim ITC on medicine purchases?
Yes, a GST-registered pharmacy can claim Input Tax Credit (ITC) on medicine purchases from distributors and manufacturers. The ITC chain flows: manufacturer (12%/5% GST) → C&F agent / distributor → retailer / pharmacy (all registered entities claim ITC). To claim ITC: ensure your supplier has filed GSTR-1 and the invoice appears in your GSTR-2B. Pharmacies on the Composition Scheme (turnover ≤₹75 lakh, pay 1% GST) cannot claim ITC — they pay a flat rate but lose ITC on purchases.
Does a hospital charge GST on medicines given to patients?
Healthcare services provided by a clinical establishment are exempt from GST. When a hospital supplies medicines as part of an in-patient treatment package, the entire package (including medicines, room rent, diagnostics) is treated as a composite healthcare supply and is exempt. However, if a hospital runs a standalone pharmacy or sells medicines to out-patients separately (not part of a treatment package), those medicine sales attract normal GST (12% or 5%). Most hospital pharmacies serving outpatients charge GST on retail medicine sales.
Related Topics
GST Compliance for Your Pharmacy or Pharma Business
Our GST team handles registration, monthly GSTR-1/3B filing, ITC reconciliation, and annual returns for pharmacies, distributors, and pharmaceutical manufacturers.
Get GST Filing Help →◆ Available in 71 Cities
Gst On Pharma Near You
Expert CA/CS assistance for gst on pharma across India. Click your city for local details.
→
New Delhi
→
Mumbai
→
Bengaluru (Bangalore)
→
Hyderabad
→
Chennai
→
Kolkata
→
Pune
→
Ahmedabad
→
Noida (UP)
→
Gurgaon (Gurugram)
→
Jaipur
→
Lucknow
→
Chandigarh
→
Surat
→
Kochi (Cochin)
→
Faridabad
→
Ghaziabad
→
Greater Noida
→
Panipat
→
Sonipat
→
Manesar (IMT)
→
Dharuhera
→
Mathura
→
Palwal
→
Agra
→
Kosi Kalan
→
Aligarh
→
Khair
→
Jewar (Noida International Airport)
→
Kanpur
→
Varanasi (Kashi)
→
Prayagraj (Allahabad)
→
Meerut
→
Bareilly
→
Moradabad
→
Gorakhpur
→
Firozabad
→
Saharanpur
→
Muzaffarnagar
→
Bulandshahr
→
Hapur
→
Karnal
→
Kurukshetra
→
Ambala
→
Hisar
→
Rohtak
→
Yamunanagar
→
Rewari
→
Bhiwani
→
Jodhpur
→
Udaipur
→
Kota
→
Ajmer
→
Bikaner
→
Ludhiana
→
Amritsar
→
Jalandhar
→
Patiala
→
Mohali (SAS Nagar)
→
Bathinda
→
Dehradun
→
Haridwar
→
Rudrapur
→
Shimla
→
Solan (Baddi-Barotiwala-Nalagarh)
→
Bhopal
→
Indore
→
Gwalior
→
Jammu
→
Srinagar
→
Panchkula