Patients to benefit from GST cut, but firms may face pressure

The rationalisation of goods and services tax (GST), announced on Wednesday, directly lowers the cost of everyday medical consumables, and also high-end therapies in oncology and rare diseases, helping reduce out-of-pocket patient expenditure and better adherence to medication.

- SOHINI DAS & ANJALI SINGH

The move, however, may lead to domestic formulation makers, especially in biologics, losing input tax credit (ITC) on high-tax inputs, thereby creating margin pressure.

Most medicines, medical devices, consumables, and diagnostics that previously attracted 12 per cent GST have now been brought under the 5 per cent slab.

A targeted set of high-cost and rare-disease drugs, covering critical therapies in oncology, genetic disorders and rare metabolic conditions, has been fully exempted (nil GST).

Categories like thermometers and instruments for physical or chemical analysis, which earlier sat at 18 per cent GST, now attract only 5 per cent.