CDSCO Updates on GST Rate Changes: What Manufacturers, Importers, and Suppliers Should Know?
The Central Drugs Standard Control Organisation (CDSCO) has recently issued several important notices following the GST Council’s decision to reduce tax rates on medicines, medical devices, and diagnostics. These directives are aimed at ensuring that revised rates are properly reflected in the market and the benefits reach patients. Here are the key highlights for industry stakeholders:
No Immediate Re-labelling of Pre-September Stock:
Products released in the market before 22 September 2025 do not need to be recalled or compulsorily re-labelled/stickered. Compliance can instead be ensured through updated price lists and clear communication to retailers. [Refer PIB Frequently Asked Questions-2 (FAQs-2)]
Revised Price Lists Must Be Published:
- All manufacturers of drugs, formulations, and medical devices must take the necessary steps to ensure that every part of the supply chain, up to the retailer level, complies with the revised Maximum Retail Price (MRP) based on the updated GST rates effective from 22nd September 2025.
- Also, all manufacturers are required to share the updated price list reflecting the revised GST rates with retailers and other dealers in the supply chain and formally notify the Department.
- Retailers and wholesalers are also instructed to update their billing records and software systems to reflect the new GST-adjusted prices, effective from 22nd September 2025.[Refer PIB Frequently Asked Questions-2 (FAQs-2)]
Sticker Permission for Medical Devices:
For Class C and Class D medical devices, CDSCO has authorized manufacturers and importers to apply stickers or updated labels on existing stock to display the revised MRPs, offering a practical compliance option. [Refer Notice]
Grace Period for Old Stock
Products made or imported before the GST rate change may remain in the market with revised MRPs shown through stickers, stamps, or add-on labels. This arrangement is permitted until 31 December 2025, or until the old inventory is fully sold—whichever comes first. [Refer Notice]
Submission of Reports to Authorities:
- In addition, the Government of India, Ministry of Finance (Department of Revenue) has also released a separate notice specifying the format in which revised price data should be furnished, further standardizing compliance and reporting requirements.
- Companies are required to issue updated or supplementary price lists (in prescribed Form formats) and circulate them to dealers, retailers, State Drug Controllers, and relevant authorities, ensuring clarity on revised MRPs.
- As part of monitoring, stakeholders must also provide compliance reports. The first report must be submitted by 30th September 2025 to the Board and sent via email to the designated address. Thereafter, monthly reports are required to be submitted by the 20th of each month until March 2026.
For a detailed breakdown of GST slab changes and their impact on medical devices, IVDs, and life-saving drugs, check out this page. The given details are as of September 17, 2025; please watch this space for additional updates as they develop.
Goods and Services Tax (GST):
The Goods and Services Tax (GST), introduced in July 2017, is one of India’s biggest tax changes. Its main goal was to replace the confusing mix of central and state taxes with one single system that works across the whole country.
In the pre-GST era, businesses were subject to multiple levies including VAT, excise, service tax, and entry charges. This often meant paying “tax on tax”, which increased costs for both companies and consumers.
GST simplified this by bringing everything under one uniform tax. This not only made compliance easier for businesses but also helped create a fairer, more transparent system, reducing extra costs for everyday consumers.
Unlike earlier taxes, GST is charged in the place of consumption, ensuring that the benefit goes to the consumer’s state instead of the producer’s state. The system has four key slabs — 5%, 12%, 18%, and 28% — though under the new Next-Gen GST Reforms 2025, the Council is moving towards a simpler two-rate structure (Two broad rates—18% and 5%—plus a special 40% tax on selected de-merit goods) for better transparency and ease of use.
For healthcare, GST plays a crucial role because taxes directly impact the price of medicines, medical devices, and diagnostic services, affecting both patients and providers.
Healthcare Gains from GST Cuts:
Once GST on a medicine is cut from 12% to nil, the entire tax component disappears from the customer’s payment. For example, if a treatment costs ₹1,00,000 before tax, earlier patients had to pay ₹1,12,000 with 12% GST. Now, with the exemption, the payable amount is back to ₹1,00,000.
This essentially means patients save the entire tax portion, which can be significant for high-value therapies such as cancer drugs or treatments for rare diseases. For individuals who need regular or long-term treatment, these savings accumulate quickly, easing the financial burden on families and improving access to critical care.
How Patients Benefit from GST Cuts?
The 56th meeting of the GST Council, chaired by Union Finance Minister Nirmala Sitharaman, has brought a major shift in India’s tax framework. As part of the Next-Gen GST Reforms 2025, the Council approved a simplified two-slab system and sweeping tax reductions across essential sectors. Among the biggest beneficiaries is healthcare, where GST has been reduced on life-saving medicines, diagnostics, and medical devices.
These reforms, effective 22-September-2025, are designed to make healthcare more affordable and accessible while also supporting domestic pharmaceutical and medical technology industries.
Why This Matters?
The healthcare sector has often faced challenges of high out-of-pocket expenditure for patients. With GST reduced or eliminated on critical items, families dealing with cancer, rare diseases, or chronic treatments will experience significant cost relief.
At the same time, reduced rates on diagnostics, oxygen, surgical devices, and even everyday medical supplies make preventive and primary healthcare more affordable.
7 Pillars of Next-Gen GST Reforms:
The Next-Gen GST Reforms 2025 are built on seven strong pillars that aim to simplify the system, reduce compliance costs, and make taxation more citizen- and business-friendly. These pillars reflect the government’s vision of a modern, transparent, and globally competitive GST framework.
1.Simplified Rate Structure
The four-rate GST slab system has been rationalised into two main slabs — 5% and 18%. This makes taxation easier to understand for businesses and citizens, while ensuring essential items like medicines and healthcare products remain affordable.
2. Focus on Essential Sectors
Healthcare, education, and insurance have received priority, with significant tax cuts on life-saving medicines, diagnostic kits, medical equipment, and health insurance premiums. This ensures public welfare stays at the centre of GST reforms.
3. Ease of Compliance
The reforms introduce simpler return filing, faster refunds, and reduced paperwork. Small businesses, especially in medtech and pharma, will benefit from 90% provisional refunds in cases of inverted duty structure, improving cash flow.
4.Digital-First Approach
A push towards end-to-end digitisation in registration, return filing, and compliance has been made. This includes user-friendly portals and real-time data validation, making GST easier to navigate for taxpayers of all sizes.
5. Support for Domestic Manufacturing
By lowering GST on medical devices, pharmaceuticals, and industrial inputs, the government is encouraging Make in India and strengthening local supply chains in critical sectors like healthcare and diagnostics.
6. Transparency and Accountability
The reforms include stronger mechanisms to track transactions, prevent tax evasion, and ensure consistency across states. This builds greater confidence among businesses and investors in the GST system.
7. Global Competitiveness
India’s GST is being aligned with international best practices, making it easier for global businesses to operate in the country while also boosting India’s image as a transparent and predictable market.
Impact on Medical Devices, IVDs, and Equipment :
- Lower treatment costs for patients: Devices such as oxygen concentrators, thermometers, and surgical instruments are now taxed at just 5% instead of 12–18%. This translates to more affordable procedures in hospitals and clinics.
- Affordable diagnostics: By cutting GST on diagnostic kits and reagents (HSN 3822) from 12% to 5%, the cost of routine and specialised tests is expected to come down. This directly supports early detection and prevention of diseases like diabetes, TB, and cancer.
- Boost for IVD industry: Reduction in GST on blood glucose monitoring systems (glucometers and strips) and other in-vitro diagnostic devices will expand access for chronic patients, especially diabetics, reducing the burden of self-care expenses.
- Support for domestic manufacturers: India’s medtech and IVD companies often face high costs due to an inverted duty structure. With lower GST and provisional refunds, the reforms will improve cash flow and encourage Make in India production.
- Encouraging adoption of advanced technologies: High-value devices like radiology and radiotherapy equipment, breathing apparatus, and therapeutic machines are now taxed at 5% instead of 18%. This will make advanced treatment more accessible in Tier-II and Tier-III cities.
- Improved accessibility for routine supplies: Basic consumables such as bandages, gauze, sterile dressings, and surgical gloves are now under the 5% slab. This helps hospitals reduce procurement costs, indirectly lowering patient bills.
- Strengthening veterinary and dental care: The reforms also extend to dental and veterinary instruments, making treatments in these areas more affordable for a wider population.
- Wider insurance coverage: With life and health insurance premiums exempted from GST, patients will now have better financial protection to complement reduced device and medicine costs.
Here’s a comprehensive overview of the revised GST rates for medicines, diagnostic tools, medical devices, and essential healthcare products.
Revised GST Rates on Medicines, Medical Devices & Healthcare Essentials (Effective 22-September-2025)
| S. No. | Description | Medicine Name | Previous GST | New GST | HSN Code |
| 1 | Life-saving drugs & medicines(3)- Cancer, rare diseases, severe chronic diseases :5% to 0% (Nil) | Agalsidase Beta | 5% | NIL | Chapter 30 |
| 2 | Imiglucerase | 5% | NIL | Chapter 30 | |
| 3 | Eptacog alfa (activated recombinant coagulation factor VIIa) | 5% | NIL | Chapter 30 | |
| 1 | Life-saving drugs & medicines(33): General critical conditions from 12% to 0% (Nil) | Onasemnogene abeparvovec | 12% | NIL | Chapter 30 |
| 2 | Asciminib | 12% | NIL | Chapter 30 | |
| 3 | Mepolizumab | 12% | NIL | Chapter 30 | |
| 4 | Pegylated Liposomal Irinotecan | 12% | NIL | Chapter 30 | |
| 5 | Daratumumab | 12% | NIL | Chapter 30 | |
| 6 | Daratumumab (subcutaneous) | 12% | NIL | Chapter 30 | |
| 7 | Teclistamab | 12% | NIL | Chapter 30 | |
| 8 | Amivantamab | 12% | NIL | Chapter 30 | |
| 9 | Alectinib | 12% | NIL | Chapter 30 | |
| 10 | Risdiplam | 12% | NIL | Chapter 30 | |
| 11 | Obinutuzumab | 12% | NIL | Chapter 30 | |
| 12 | Polatuzumab Vedotin | 12% | NIL | Chapter 30 | |
| 13 | Entrectinib | 12% | NIL | Chapter 30 | |
| 14 | Atezolizumab | 12% | NIL | Chapter 30 | |
| 15 | Spesolimab | 12% | NIL | Chapter 30 | |
| 16 | Velaglucerase Alpha | 12% | NIL | Chapter 30 | |
| 17 | Agalsidase Alfa | 12% | NIL | Chapter 30 | |
| 18 | Rurioctocog Alpha Pegol | 12% | NIL | Chapter 30 | |
| 19 | Idursulphatase | 12% | NIL | Chapter 30 | |
| 20 | Alglucosidase Alfa | 12% | NIL | Chapter 30 | |
| 21 | Laronidase | 12% | NIL | Chapter 30 | |
| 22 | Olipudase Alfa | 12% | NIL | Chapter 30 | |
| 23 | Tepotinib | 12% | NIL | Chapter 30 | |
| 24 | Avelumab | 12% | NIL | Chapter 30 | |
| 25 | Emicizumab | 12% | NIL | Chapter 30 | |
| 26 | Belumosudil | 12% | NIL | Chapter 30 | |
| 27 | Miglustat | 12% | NIL | Chapter 30 | |
| 28 | Velmanase Alfa | 12% | NIL | Chapter 30 | |
| 29 | Alirocumab | 12% | NIL | Chapter 30 | |
| 30 | Evolocumab | 12% | NIL | Chapter 30 | |
| 31 | Cystamine Bitartrate | 12% | NIL | Chapter 30 | |
| 32 | C1-Inhibitor Injection | 12% | NIL | Chapter 30 | |
| 33 | Inclisiran | 12% | NIL | Chapter 30 | |
| 1 | Medical Equipment & Supplies – GST Reduced from 12% → 5% | Wadding, gauze, bandages, dressings, adhesive plasters, poultices, etc. (impregnated/coated with pharma substances or packed for medical, surgical, dental, veterinary use) | 12% | 5% | 3005 |
| 2 | Pharmaceutical goods specified in Note 4 to Ch. 30 (e.g., sterile surgical catgut, sterile sutures, tissue adhesives, laminaria tents, haemostatics, adhesion barriers, waste pharmaceuticals) – other than contraceptives and ostomy appliances | 12% | 5% | 3006 | |
| 3 | All diagnostic kits and reagents | 12% | 5% | 3822 | |
| 4 | Surgical rubber gloves / medical examination rubber gloves | 12% | 5% | 4015 | |
| 5 | Blood glucose monitoring system (Glucometer) and test strips | 12% | 5% | 90 (any chapter) | |
| 6 | Patent Ductus Arteriosus / Atrial Septal Defect occlusion device | 12% | 5% | 90 (any chapter) | |
| 7 | Spectacles and goggles for correcting vision | 12% | 5% | 9004 | |
| 8 | Instruments & appliances used in medical, surgical, dental, or veterinary sciences (incl. scintigraphic apparatus, electro-medical devices, sight-testing instruments) | 12% | 5% | 9018 | |
| 9 | Mechano-therapy, massage apparatus, aptitude-testing, ozone/oxygen therapy, aerosol therapy, artificial respiration & other therapeutic respiration apparatus | 12% | 5% | 9019 | |
| 10 | Breathing appliances & gas masks (excluding protective masks without mechanical parts/filters) | 12% | 5% | 9020 | |
| 11 | Apparatus using X-rays, alpha/beta/gamma radiations (including: radiography, radiotherapy equipment, X-ray tubes, generators, control panels, desks, screens, treatment tables/chairs/lights) | 12% | 5% | 9022 | |
| 1 | Reduction of GST from 18% → 5% on Medical Apparatus & Devices | Instruments & apparatus for physical/chemical analysis (e.g., polarimeters, spectrometers, gas/liquid chromatography, electrophoresis apparatus, calorimeters, viscometers) – specifically when used for medical/surgical/diagnostic purposes | 18% | 5% | 9027 |
| 2 | Medical, surgical, dental and veterinary thermometers | 18% | 5% | 9025 | |
| 1 | Reduction of GST on All Other Drugs & Medicines (12% → 5%) | Medicaments (not in measured doses or retail packing, e.g., bulk formulations for therapeutic/prophylactic use) | 12% | 5% | 3003 |
| 2 | Medicaments (put up in measured doses or retail packing, including: allopathy, Ayurveda, Unani, Siddha, Homoeopathy, etc.) | 12% | 5% | 3004 | |
| 3 | Animal blood prepared for therapeutic, prophylactic or diagnostic uses; antisera and other blood fractions and modified immunological products, whether or not obtained by means of biotechnological processes; toxins, cultures of micro-organisms (excluding yeasts) and similar products | 12% | 5% | 3002 | |
| 4 | Pharmaceutical goods (other than contraceptives & ostomy appliances, already exempt) | 12% | 5% | 3006 (parts) | |
| 1 | Other Healthcare Essentials | Medical oxygen | 12–18% | 5% | 2804 |
| 2 | Instruments and apparatus for medical, surgical, dental or veterinary uses for physical or chemical analysis. | 12–18% | 5% | 9021 |
Conclusion:
The GST reforms of 2025 highlight the government’s focus on creating an affordable and inclusive healthcare system by easing costs on medicines, diagnostics, and medical devices. The tax cuts are expected to reduce the overall cost of care, benefiting patients locally while also attracting more international medical tourists. While these measures reduce the tax burden, companies entering the Indian market must still navigate complex regulatory approvals, product registrations, and import procedures to ensure compliance.
This is where Morulaa Company plays a crucial role. With expertise in India-specific regulatory pathways, CDSCO registration, import licensing, and compliance for both medical devices and in-vitro diagnostics (IVDs), Morulaa helps manufacturers and distributors streamline market entry. By offering end-to-end support — from documentation and approvals to import clearances — it ensures that global healthcare innovations reach Indian patients faster and more efficiently.
Together, the GST relief and professional regulatory support pave the way for a more accessible, affordable, and innovation-driven healthcare ecosystem in India.
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