In a major relief for patients battling cancer and rare diseases, the Union government has reduced GST on 33 essential medicines from 12% to zero, alongside other healthcare items. The announcement came after a GST Council meeting chaired by Finance Minister Nirmala Sitharaman, which also approved a comprehensive restructuring of the indirect tax system.
The Council streamlined the earlier four GST slabs into two by removing the 12% and 28% categories, while retaining the 5% and 18% brackets.
Sitharaman confirmed that several life-saving drugs for cancer, rare diseases, and chronic illnesses will now attract either 5% or nil GST. Corrective eyewear, including spectacles and goggles, will also see rates cut from 28% to 5%.
Health and life insurance premiums, earlier taxed at 18%, have been fully exempted, making policies more affordable and accessible nationwide. The new rates will come into effect from September 22.
Other medical essentials such as oxygen, diagnostic kits, and surgical equipment will benefit from substantial reductions, with many items dropping from 18% to 5%.
Meanwhile, sin goods like pan masala, cigarettes, chewing tobacco, and bidi will continue to attract high GST and cess until pending liabilities are cleared. Aerated sugary drinks will see an increased GST of 40% (up from 28%).
The Finance Minister emphasized that these reforms aim to reduce treatment costs, improve healthcare affordability, and expand insurance coverage across India.