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How GST Might Effect Your Healthcare

How GST Might Effect Your Healthcare


GST( Goods and Services Tax)  is based on the idea of one nation, one tax in order to  make India one unified common market.

GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages.



There are different categories for the tax rates on the medicines and pharmaceuticals viz; NIL (no tax), 5%, 12%, 18%.

The National Pharmaceutical Pricing Authority (NPPA) follows the below mentioned  procedure to keeping a check on the prices of drugs without including the GST element:

  • The excise duty element and VAT from the existing ceiling price of the drugs have been deducted.
  • Where a scheduled drug has already been exempted from excise duty the ceiling price has not been revised.

 Certain life-saving drugs are in the 5 per cent tax slab under the new regime.

  • The prices of stents have not been increased under the new regime.
  • Prices of immunosuppressant like cyclosporine and drugs to treat leukemia remain unchanged.
  • Prices of medicines including Erythropoietin, Filgrastim and Hepatitis B vaccine will not see any change.Even though there are speculations that adding the GST element to the new ceiling price will make medicines slightly more expensive than their current rates, it is also believed that  the base price of the drugs having been lowered, even with the roll out of the GST, the price increase will remain marginal which will come as a solace to the pharmaceutical  industryDRUGS THAT ARE TO GET CHEAPERNAAP also announced provisional ceiling prices of 761 medicines which includes a list of antibiotics and drugs for treating cancer, HIV, diabetes.
  • Anti-cancer drug Bortezomib has been brought down to Rs. 11,160 from Rs.11,637 for a packet of injection powder.
  • The ceiling price for a pack of Docetaxel will come down to Rs 10,326.94 from Rs 10,767.88
  • Gemcitabine price will come down to Rs 4,813.94 per pack from Rs 5,019.49.
  • Trastuzumab injection pack used for the purpose of treatment of breast cancer will see a substantial decrease from Rs 56,912.83 to Rs 54,582.25.
  • Regular medicines like Paracetamol have also seen price cuts.


The tax rate for a health plan premium in pre-GST regime was 15 per cent, which has increased by 3 per cent, making it 18 per cent on the entire base premium amount.

The duty which is levied on the imported equipment would be charged as a credit in the GST system. This overall might boost the growth of healthcare industry. Ancillary medical procedures and diagnostics, which play a key role in treatment, have been put under the 12% and 18% slab. Even though health sector continues to be exempted under GST,patients may end up paying higher medical bills and hospitalisation costs as GST applicable on expenses incurred by hospitals has gone up.


Information source: 



Author: Diksha Kakkar



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