04/09/2025
One of the biggest tax reforms in recent years was introduced at the 56th GST Council meeting (September 3, 2025), and the healthcare sector stands to gain a great deal from it. As of September 22, 2025, India has transitioned to a simplified GST structure comprising two main slabs: the 5% Merit Rate and the 18% Standard Rate.
The fact that the majority of medical equipment is now covered by the 5% GST slab is the largest victory for the medical community. This category encompasses essential equipment like surgical tools, electrodignostic equipment, diagnostic kits, dialysis supplies, syringes, bandages, glucometers, thermometers (previously taxed at 18%), and medical oxygen.
Moreover, 3 essential cancer and rare disease medications, as well as 33 life-saving medications, are now fully tax-free. This exemption lowers treatment expenses and increases patient access to therapies.
However, under the standard slab, expensive imaging systems (MRI, CT scans), and specialized OT equipment are still subject to 18% GST.
Effect on the Sector:
Doctors & Healthcare Providers: More affordable consumables and diagnostic tools mean reduced operational costs and better patient affordability.
Medical Equipment Dealers: The streamlined tax structure enables competitive pricing and opens up new growth opportunities for dealers.
Patients: Reduced costs for equipment and medications will lead to a direct decrease in treatment expenses.
This reform is designed to enhance the affordability, accessibility, and transparency of healthcare services, focusing on more than just tax implications.
đź’ˇ What are your views on how this GST change will impact day-to-day medical practice and equipment trade?
