Indian Medical Association Applauds GST Reduction on Life-Saving Drugs, Urges Further Exemptions
New Delhi, India – August 26, 2025
The Indian Medical Association (IMA), representing over four lakh doctors across India, has warmly welcomed the Goods and Services Tax (GST) Council’s decision to reduce GST rates on several critical and life-saving medicines, including those used for cancer treatment. Announced as part of broader tax reforms, the move has been hailed as a significant step toward making healthcare more affordable and accessible for millions of patients battling life-threatening conditions. However, the IMA has also called for further exemptions and reforms to alleviate the financial burden on patients and healthcare providers, emphasizing the need for a more comprehensive approach to healthcare affordability.
GST Reduction: A Step Toward Affordable Healthcare
The GST Council, in its recent deliberations, proposed reducing GST rates on essential medicines, particularly cancer drugs, from 12% to 5%, with some treatments potentially attracting a nil rate. This decision is expected to significantly lower the cost of medications for serious conditions such as cancer, chronic kidney disease, and life-threatening infections. According to an IMA press release, this reduction reflects the government’s commitment to strengthening public health infrastructure and supporting those grappling with severe medical conditions.
“The reduction in GST on critical drugs is a commendable step that will ease the financial burden on families struggling with life-threatening illnesses,” said Dr. Dilip Bhanushali, IMA’s National President. “This move underscores the government’s patient-centric approach and its dedication to improving healthcare accessibility across India,” added Dr. Sarbari Dutta, Honorary Secretary General of the IMA.
The decision is particularly impactful for patients requiring long-term treatments, such as chemotherapy, immunotherapy, and targeted therapies for cancer. For instance, drugs like Dinutuximab (Quarziba), used for specific cancer treatments, have previously been exempted from Integrated GST (IGST) in certain cases, setting a precedent for such relief measures. The current reduction is expected to benefit millions of patients by lowering out-of-pocket expenses, which often push families into financial distress during medical emergencies.
IMA’s Call for Broader GST Exemptions
While lauding the GST Council’s decision, the IMA has urged the government to take bolder steps by completely exempting GST on a wide range of life-saving and essential medicines. The association highlighted several categories of drugs that should be considered for full exemptions, including:
- Anti-cancer drugs used in chemotherapy, immunotherapy, and targeted therapies.
- Antidiabetic drugs, such as insulin and oral agents, critical for managing diabetes.
- Cardiac medicines and antihypertensives for heart-related conditions.
- Drugs for chronic respiratory conditions, such as asthma and chronic obstructive pulmonary disease (COPD).
- Treatments for chronic kidney disease, collagen vascular diseases, thyroid disorders, and osteoporosis.
- Medications for rare conditions, including hemophilia and myelodysplastic syndromes, as well as intravenous immunoglobulin for serious infections.
The IMA emphasized that a complete GST exemption on these drugs would significantly reduce treatment costs, making healthcare more equitable, especially for low-income households. “A full exemption on these essential medicines would be a game-changer for patients who face immense financial strain due to prolonged medical treatments,” the IMA stated in its release.
Beyond Medicines: Medical Equipment and Hospital Beds
The IMA also advocated for reduced GST rates on medical equipment, which forms a vital backbone of healthcare delivery. Currently, advanced medical equipment such as ventilators and surgical instruments attracts an 18% GST rate, increasing operational costs for hospitals and clinics. A reduction in these rates, the IMA argues, would lower treatment costs for patients and ease the financial strain on healthcare providers. “Lowering GST on medical equipment would significantly reduce operational costs, enabling hospitals to offer more affordable care,” the IMA noted.
Additionally, the IMA made a strong case for removing GST on hospital beds entirely, asserting that beds are a fundamental necessity in healthcare, not a luxury item. “Hospital beds are essential healthcare infrastructure. Removing GST on them would ensure affordability of hospitalization, particularly for those requiring long-term care,” said Dr. Bhanushali.
Health Insurance Premiums and Procedural Reforms
In a bid to promote wider adoption of health insurance, the IMA called for GST exemptions on health insurance premiums. Currently, health insurance premiums are subject to an 18% GST, which discourages many individuals and families from securing coverage. “Exempting GST on health insurance premiums would encourage more people to adopt insurance, reducing financial stress during medical emergencies and improving overall healthcare access,” the IMA stated.
The association also raised concerns about procedural hurdles faced by its state and local branches in securing GST and Tax Deduction Account Number (TAN) registrations due to nomenclature-related issues. These complexities, the IMA noted, create unnecessary compliance burdens for its branches. The association has appealed to the GST Council to streamline these processes to ensure smoother operations for healthcare organizations across the country.
Public and Industry Response
The GST reduction has been met with positive reactions from patients, healthcare providers, and industry stakeholders. Social media platforms, including X, have seen trending discussions praising the move, with users highlighting its potential to alleviate the financial burden on middle-class families. One user commented, “My mother needs regular medication for hypertension and diabetes. Even a 5% reduction makes a difference over months.” Another healthcare professional noted, “This is a step in the right direction, but the government must also address price variations between branded and generic medicines to ensure true affordability.”
However, some stakeholders have cautioned that the benefits of the GST reduction must reach patients directly and not be absorbed by intermediaries such as hospitals or pharmaceutical companies. The IMA echoed this sentiment, urging the government to implement mechanisms to ensure that cost savings are passed on to consumers.
Context and Broader Implications
The GST Council’s decision comes as part of ongoing tax reforms aimed at making essential goods and services more affordable. According to industry reports, GST rates on medicines in India typically range from 0% to 18%, with life-saving drugs like vaccines and those for tuberculosis, AIDS, and diabetes attracting a 5% rate, while non-essential items like nicotine gums are taxed at 18%. The recent reduction aligns with recommendations from the 54th GST Council Meeting, where the Finance Minister emphasized lowering rates on cancer drugs to enhance affordability.
The IMA’s advocacy for further exemptions builds on previous rulings, such as the Authority for Advance Ruling (AAR) in Kerala, which clarified that medicines and consumables used during hospitalization are subject to a nil GST rate as part of composite healthcare services. This precedent underscores the potential for broader exemptions to further reduce healthcare costs.
Looking Ahead
The IMA remains hopeful that the GST Council will consider its additional demands in future meetings, particularly the upcoming 56th GST Council Meeting scheduled for September 3–4, 2025. The association’s call for exemptions on medical equipment, hospital beds, and health insurance premiums, alongside a broader range of medicines, reflects a comprehensive vision for a more affordable and accessible healthcare system in India.
“We extend our sincere thanks to the GST Council for its responsive and patient-centric approach,” the IMA concluded in its statement. “We are optimistic that these pending matters, vital to strengthening India’s healthcare system, will receive due consideration in the interest of public health.”
As India continues to grapple with rising healthcare costs, the GST reduction on life-saving drugs marks a pivotal moment in the nation’s efforts to prioritize public health. The IMA’s proactive stance and detailed recommendations underscore the medical community’s commitment to advocating for patients and ensuring equitable access to care.
For More News Updates Follow Us On Www.tconews.in
