A GST Relief for Patients

THE 56th meeting of the GST Council led by Union Finance Minister Nirmala Sitaraman has recommended reduction of Goods and Services Tax (GST) rate for all drugs and medical devices to 5%, and waiver of GST for 36 lifesaving drugs.

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This is part of the overall GST reforms recommended by the GST Council, in line with the Prime Minister Narendra Modi's announcement in his Independence Day Speech regarding the government's intention to bring in 'Next-Generation reforms in GST'. The new GST regime has come into effect from September 22. The Council also recommended reduction of GST from 18% to 5% on various medical apparatus and devices used for medical, surgical, dental or veterinary usage or for physical or chemical analysis and reduction of GST from 12% to 5% on various medical equipment and supplies devices such as wadding gauze, bandages, diagnostic kits and reagents, blood glucose monitoring system (Glucometer), etc. Obviously, the government did not exempt all medicines from GST in general because if all medicines are fully exempted from GST, the manufacturers or dealers would not be able to claim ITC on GST paid on raw materials and will have to reverse the ITC paid on the inputs. This would have increased their effective tax incidence and cost of production. This will in turn be passe