33 life-saving drugs get GST waiver; insurance goes tax-free too

New Delhi, Sept 4: In a major relief for patients battling cancer and rare diseases, the Union government slashed Goods and Services Tax (GST) on 33 life-saving medicines from 12% to zero, among a slew of items on Wednesday.

The decision was taken at the GST Council meeting chaired by Finance Minister Nirmala Sitharaman, which also approved a broad rationalisation of the indirect tax regime.

The four existing slabs have now been pruned to two, with the 12% and 28% brackets scrapped, while the 5% and 18% slabs will remain.

“GST on 33 life-saving drugs and medicines has come down from 12% to zero,” Sitharaman said, adding that several other medicines and health-related products will see their rates reduced as well.

According to the revised structure, some drugs and devices used in the treatment of cancer, rare diseases, and chronic conditions will move from 12% or 18% to 5% or nil.

“There are several drugs and medicines coming down to 5% from 12%. Similarly, spectacles and goggles for correcting vision are also coming down to 5% from 28%,” she said.

The changes in GST rates on services will come into effect from September 22. Health insurance and life insurance premiums, currently taxed at 18%, will now attract no GST.

The Finance Minister said the move will make insurance more affordable for the common man and help expand coverage across the country.

Medical oxygen, diagnostic kits, and a range of medical and surgical apparatus will also see significant rate cuts—from 18%to 5% in many cases.

However, products deemed harmful to health, including pan masala, cigarettes, chewing tobacco and bidi, will continue under high GST rates and compensation cess until outstanding cess-linked loans are cleared.

Aerated sugary beverages, meanwhile, will attract a higher GST rate of 40%, up from the current 28%.

IANS