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.
- 1Manufacturer / importerCharges 5% on the device
- 2Distributor / retailerPasses device on at 5% · claims ITC
- 3PatientPays a lower embedded tax cost
- 4HospitalBuys at 5% · no ITC on exempt service
- 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.
- Rates & notifications: gst.gov.in
- CBIC rate finder: cbic-gst.gov.in
- 56th GST Council press release: gstcouncil.gov.in
- Healthcare exemption: Notification 12/2017-CT(R)
- GST 2.0 medicine & device cuts effective 22 September 2025
Disclaimer: This guide is general information based on the law and notifications in force when it was last updated. It is not professional advice for your case — rates, thresholds and due dates change, so check the current position or speak to our CA team before you act on it.