Key Points

The sweeping GST reforms unveiled on September 3, among other measures by the central government, have provided a substantial relief on health care, with taxes being either fully exempted or brought down to the lowest slab.

Since then, there has been a widespread query about what will happen to medicines already in the supply chain before the new GST rates come into effect.

Is it required to recall and re-label MRP on medicines already in the supply chain before September 22, 2025? How will the re-labelling be implemented?

To settle the curiosity of the public, an FAQ has been put out, asserting the National Pharmaceutical Pricing Authority's position on the matter. NPPA has so far, on two occasions, said that all manufacturers/ marketing companies selling drugs/ formulations shall revise the Maximum Retail Price (MRP) of drugs/formulations (including medical devices).

The manufacturers/ marketing companies shall issue a revised price list or supplementary price list, in Form V/VI, to dealers and retailers for display to consumers, and to State Drug Controllers and the Government, reflecting the revised GST rates and revised MRP.

Recalling, re-labelling, or re-stickering on the label of a container or pack of stocks released in the market prior to September 22, 2025, is not mandatory if manufacturer/ marketing companies are able to ensure price compliance at the retailer level.

So, all in all, the consumers will avail the benefits of the GST rate rationalisation.

The sweeping changes have been made under the next-generation GST (Goods and Services Tax) rationalisation just days after Prime Minister Narendra Modi announced it from the ramparts of the Red Fort on Independence Day.

This is aimed at reducing the tax burden on citizens while stimulating economic growth.

On September 22, the first day of Navratri, all changes in GST rates will come into effect, much before Diwali, which was indicated by the prime minister from the ramparts of the Red Fort on Independence Day this year.

The GST Council, on September 3, after a threadbare discussion, approved significant rate cuts across multiple sectors, which the government has described as a Diwali gift for the nation.

As expected, the healthcare sector has received crucial relief as well, with individual health and life insurance policies being fully exempted from GST, at 18 per cent earlier.

The tax on thermometers has been reduced from 18 per cent to 5 per cent, while medical-grade oxygen, diagnostic kits, reagents, glucometers, and test strips will also now fall under the 5 per cent category instead of 12 per cent.

Corrective spectacles see their GST reduced to 5 per cent.

Reduction of GST from 12 per cent to NIL on 33 lifesaving drugs and medicines, and from 5 per cent to NIL on 3 lifesaving drugs and medicines used for the treatment of cancer, rare diseases and other severe chronic diseases has been provisioned for.

Reduction of GST on all other drugs and medicines from 12 per cent to 5 per cent has been provisioned for. Reduction of GST from 18 per cent to 5 per cent on various medical apparatus and devices used for medical, surgical, dental or veterinary usage or for physical or chemical analysis.

As high as 99% of all the goods which were earlier in the 12 per cent GST bracket have now been brought down to the 5 per cent GST bracket, Finance Minister Nirmala Sitharaman said Sunday.

The GST Council in its 56th meeting has reduced the GST structure from four slabs (5%, 12%, 18%, 28%) to two main rates--5% (merit rate) and 18% (standard rate) along with a 40% special rate for sin/luxury goods.

- ANI