Daijiworld Media Network - New Delhi

New Delhi, Sep 4: In a landmark decision aimed at improving access to critical healthcare, the Union government has reduced GST rates on 33 life-saving cancer and rare disease drugs from 12% to 0%. The sweeping move, approved by the GST Council chaired by Finance Minister Nirmala Sitharaman, marks a significant shift in India’s indirect tax structure, with a focus on public health and affordability.

“This is a historic step,” said Sitharaman during the press briefing. “GST on 33 essential drugs used to treat cancer and rare diseases has been brought down to zero to make them more accessible to patients and their families.”

Alongside the rate cuts on medicines, the Council announced a rationalisation of the GST slab system, reducing the number of slabs from four to two. The 12% and 28% slabs have been scrapped, leaving only the 5% and 18% slabs as the new standard rates. However, certain categories like "sin goods" will see increased GST rates, moving from 28% to 40%.

GST on other life-saving drugs has also been lowered to either 5% or zero depending on their classification. Medical equipment such as diagnostic kits, glucometers, bandages, gauze, and reagents will now attract a 5% GST, down from previous rates of 12% or 18%. Essential medical oxygen, diagnostic kits, and other related devices will similarly benefit from reduced taxes. The GST on health and life insurance premiums has been cut from 18% to zero, a move the Finance Minister said will help make insurance more affordable and expand coverage across the country. Additionally, spectacles and corrective goggles will see their GST rate reduced from 28% to 5%, along with other medical devices used for surgical, dental, veterinary, or chemical analysis.

The new GST rates on services are set to come into effect from September 22, giving businesses and service providers time to adapt to the changes.

While the reforms bring relief to the healthcare sector, the government maintained strict taxation on products harmful to health, including pan masala, gutkha, bidi, cigarettes, zarda, and other tobacco products, with existing GST rates and compensation cess remaining in place until cess-related loans are cleared. Aerated drinks and sugary beverages will see their GST increased from 28% to 40%.

This comprehensive revision reflects the government’s broader commitment to healthcare reform and social equity. By removing tax burdens on essential treatments and insurance, the move is expected to reduce out-of-pocket medical expenses and promote preventive care. As India continues to expand its universal healthcare goals, today’s GST overhaul is seen as a pivotal moment in making life-saving drugs and essential services more affordable for millions.