The Union Government has informed Parliament that the Goods and Services Tax (GST) on 36 specified life-saving drugs and medicines has been reduced to Nil, replacing the earlier tax rates of 12% and 5%. The announcement was made by the Minister of State for Finance, Shri Pankaj Chaudhary, in a written reply to Rajya Sabha Unstarred Question No. 247, which sought information regarding the reduction of GST rates on life-saving medicines and medical equipment.

The reply, placed before the Rajya Sabha on 21 July 2026, highlights the government’s efforts to rationalise GST rates in the healthcare sector while clarifying the process through which such tax decisions are made.

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GST Exemption for 36 Life-Saving Medicines

In his written response, Shri Pankaj Chaudhary stated that the GST rate on 36 specified life-saving drugs and medicines has been brought down to Nil. These medicines were previously taxed at either 12% or 5% under the GST regime.

The reduction forms part of a broader tax rationalisation exercise undertaken by the GST Council to make essential healthcare products more affordable and reduce the tax burden on patients requiring critical medicines.

However, the Minister clarified that all other drugs and medicines, except those specifically exempted, continue to attract GST at the rate of 5%.

No Representations Received from Tamil Nadu

Responding to the specific concerns raised in the parliamentary question, the Minister informed the House that, according to available government records, no representations had been received from traders, manufacturing units, or service sector stakeholders in Tamil Nadu seeking a reduction in GST rates on life-saving medicines, medical equipment, or related service products.

The clarification indicates that the tax reduction was not initiated in response to any formal request from stakeholders in the State but was implemented as part of a nationwide policy decision taken through the GST Council mechanism.

GST Council Recommendations Form Basis of Tax Decisions

The Finance Ministry reiterated that changes in GST rates are made only on the recommendations of the GST Council, the constitutional body established under Article 279A of the Constitution.

The Council comprises representatives from the Union Government as well as all States and Union Territories, making it the apex decision-making body for matters relating to GST policy, tax rates, exemptions, and procedural reforms.

According to the Minister, all revisions to GST rates, including those concerning healthcare products, are made after deliberations and recommendations of the Council.

56th GST Council Meeting Rationalised Healthcare Tax Rates

The Minister further informed Parliament that the decision to exempt the 36 life-saving medicines from GST was taken during the 56th meeting of the GST Council, held on 3 September 2025.

During the meeting, the Council undertook a comprehensive rationalisation of GST rates applicable to the healthcare sector. One of the major outcomes of the exercise was the complete exemption of GST on the identified life-saving medicines to improve accessibility and reduce treatment costs for patients.

Medical Devices Continue to Attract Concessional GST

Apart from medicines, the GST Council also reviewed the tax structure applicable to medical devices and healthcare equipment.

The Council rationalised the GST rates on medical devices, instruments, and apparatus used in medical, surgical, dental, and veterinary sciences. Unless specifically exempted, these products now attract a concessional GST rate of 5%, ensuring a lower tax burden while maintaining a uniform tax structure across essential healthcare products.

Healthcare Sector Continues to Receive Tax Relief

The parliamentary reply reflects the government’s continuing efforts to simplify and rationalise GST rates in the healthcare sector. By exempting specified life-saving medicines and extending concessional taxation to most medical devices, the GST framework seeks to improve affordability of critical healthcare products while maintaining a balanced indirect tax regime.

The clarification also reinforces that GST rate revisions are determined through the institutional mechanism of the GST Council rather than through isolated requests from individual States or industry stakeholders, ensuring a uniform national approach to indirect taxation.

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