In a major move to ease the financial burden on patients, the National Pharmaceutical Pricing Authority (NPPA) has announced that medicines and medical devices previously under the 5% GST slab will now be exempt from GST, effective September 22, 2025. This decision follows the 56th GST Council meeting and requires all pharmaceutical manufacturers and marketers to update their product pricing to reflect the tax reduction and pass the benefits to consumers.
The NPPA has instructed all drug and medical device manufacturers and marketers to revise the Maximum Retail Price (MRP) of their products from September 22 to account for the reduced GST rates. The authority stressed that "the benefit of the GST cut must reach consumers and patients without delay."
"Manufacturers and marketing companies must issue a revised or supplementary price list indicating the new GST rates and updated prices," the NPPA stated. These lists must be shared with dealers, retailers, state drug controllers, and other relevant government agencies.
To ensure transparency, the NPPA encouraged companies to use electronic, print, and social media platforms to inform the public about the price reductions due to the GST changes. Industry associations have also been urged to place advertisements in local language newspapers and national dailies to reach both retailers and consumers nationwide.
The NPPA clarified that if companies can ensure retail-level price compliance through these awareness initiatives, there is no need to recall, relabel, or re-sticker existing stock already distributed before September 22.
Medicines in the 5% GST slab will now attract 0% GST.
Drugs previously taxed at 12% remain unaffected.
This directive forms part of a broader effort to make essential medicines more affordable and accessible amid rising healthcare costs. With the new GST structure coming into effect, patients can expect lower prices on several life-saving drugs and medical products across the country.