GST Rate for Pharmaceutical Products

Introduction 

The Goods and Services Tax (GST) on the Pharmaceutical Industry is a tax applied to the sale of pharmaceutical products and services.  The pharmaceutical industry generally falls under the 5%, 12% and 18% GST slab. This tax impacts the pricing of medicines and healthcare services, influencing the overall cost structure for manufacturers, distributors, and consumers. 

GST Rates on Pharmaceuticals

Nil Rated

• Human blood and its by-products, as well as all contraceptives and Sanitary napkins.

5% GST Rate

• Vaccines and medicines for diseases like tuberculosis, AIDS, diabetes, malaria, etc.
• COVID-19 diagnostic test kits
• Insulin
• Animal or human blood vaccines
• Oral rehydration salts
• Diagnostic kits
• Drugs including Dopamine, Penicillamine, Influenza Vaccine, Protamine, BCG vaccine, among others
• Formulations from bulk drugs such as Streptomycin, Pyrazinamide, Hydrocortisone, Quinine, among others
• Artificial kidneys, disposable sterilized dialyzer, micro barrier of artificial kidney, artificial limbs, and orthopedic appliances
• Parts of assistive devices including wheelchairs, tricycles, braillers, crutches, walking frames, etc.
• Assistive devices for disabled such as braille writers, canes, electronic aids like sonic guides, artificial electronic ears (cochlear implants), among others
• Coronary stents/stent systems
• Ostomy Appliances
• Milk food for babies

12% GST Rate

• Medicines from Ayurvedic, Unani, Homoeopathic, Siddha, or Biochemic systems.
• Organs for organotherapeutic purposes, Dried or powdered; extracts of glands or other organs; Heparin and its salts; Human or animal substances prepared for therapeutic or prophylactic purposes, not otherwise specified; Antisera and other blood fractions; Immunological products created through biotechnological methods; Toxins, microbe cultures (excluding yeasts), and similar goods.
• Ayurvedic, Unani, Homoeopathic, Siddha, or Biochemic systems medicaments: Packaged for retail sale in measured doses or forms.
• Wadding, gauze, bandages and materials impregnated or coated with medicinal substances or packaged for retail sale for medical, surgical, dental, or veterinary uses (e.g., dressings, adhesive plasters, poultices).
• Diabetic foods
• Blood glucose monitoring system (glucometer) and test strips

18% GST Rate

• Nicotine polacrilex gum used for tobacco use cessation.
• Hygienic or pharmaceutical articles such as teats, hot water bottles, ice bags, etc.
• Preparations for oral or dental hygiene including dental floss, sold in individual retail packages.
• Surgical, medical, dental, or veterinary furniture: Such as operating tables, hospital beds, examination tables, etc., with mechanical fittings; dentists’ chairs; barbers’ chairs, etc.
• Razors and razor blades.
• Organic surface-active products and preparations, for washing the skin, whether or not containing soap.
• Infrared thermometers, pyrometers, barometers, psychrometers, and hygrometers.

GST implications on room rents in hospitals

From July 18, 2022, Non-ICU/CCU/ICCU/NICU room rents exceeding Rs. 5,000 per day are subject to 5% GST without input tax credit.

Under the Goods and Services Tax (GST), a nil GST rate applies to various medical services:

• The use of Intensive Care Unit (ICU), Critical Care Unit (CCU), Intensive Cardiac Care Unit (ICCU), or Neonatal Intensive Care Unit (NICU) rooms in hospitals or clinics. Additionally, healthcare services rendered by clinical establishments, authorized medical practitioners, or para-medics are exempt from GST, with room rents below Rs. 5,000 per day falling under this exemption. 
• Furthermore, the transportation of a patient in an ambulance is also subject to a nil GST rate.