The Government of India has announced a series of far-reaching GST rationalization measures to promote a health-positive tax regime. These reforms aim to discourage harmful consumption, lower the cost of medicines and medical devices, encourage preventive healthcare, and boost insurance coverage. The reforms strongly align with national initiatives such as Ayushman Bharat, Poshan Abhiyaan and the Fit India Movement, while supporting the vision of “Affordable Healthcare for All.”

Sharing the development, Hon’ble Prime Minister Shri Narendra Modi tweeted, “The Union Government had prepared a detailed proposal for broad-based GST rate rationalisation and process reforms, aimed at ease of living for the common man and strengthening the economy.”

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Union Health Minister, Shri Jagat Prakash Nadda also welcomed the reform, stating that “Reduced tax rates on several essential products will enhance ease of living, help families manage costs, and bring relief to different sectors.”

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Union Finance Minister, Smt. Nirmala Sitharaman highlighted that “these reforms have a multi-sectoral and multi-thematic focus, aimed at ensuring ease of living for all citizens and ease of doing business for all.”

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Healthcare services provided by doctors, hospitals, and diagnostic centres are already exempt under the current GST regime. Building upon this, the following key reforms have been approved:

Relief on Medicines and Pharmaceuticals

• GST on essential medicines reduced from 12% to 5% or Nil, easing financial burden on patients.
• Greater affordability for long-term treatment of chronic illnesses such as diabetes, hypertension, and cancer.
• Services for treatment or disposal of bio-medical waste reduced from 12% to 5%.
• Job-work in pharmaceutical manufacturing reduced from 12% to 5%, lowering production costs and addressing inverted duty structures.
• Strengthens India’s role as the “Pharmacy of the World” while ensuring affordability for domestic patients.

Reduction on Medical Devices & Equipment

• GST reduced from 12% to 5% on key medical products such as anesthetics, medical-grade oxygen, gauze, bandages, diagnostic kits, surgical gloves, glucometers, thermometers, and other appliances.
• This will lower the cost of healthcare delivery for hospitals, diagnostic centres, and clinics.
• Encourages wider adoption of modern diagnostic tools, particularly in Tier-2 and Tier-3 cities.

Vision Care

• GST on spectacles, spectacle lenses, and contact lenses reduced from 12% to 5%.
• Makes vision correction more affordable for students, elderly citizens, and low-income households.
• Expected to improve productivity and boost adoption, as nearly 10 crore people are estimated to lack proper spectacles.

Insurance Coverage

• Individual health insurance policies (including family floaters and senior citizen plans) have been exempted from GST.
• This will make premiums more affordable for middle-class households and encourage wider insurance adoption.
• Complements Ayushman Bharat and PMJAY by expanding private coverage, reducing out-of-pocket expenditure, and driving the mission of Health for All.

Essential Nutrition and Holistic Health

• UHT milk and paneer (branded and unbranded) exempted from GST, ensuring daily nutrition remains tax-free.
• Dry fruits and diabetic foods reduced from 12% to 5%, promoting healthy dietary habits.
• Prepared or preserved fish, fruit pulp or juice-based drinks, and beverages containing milk reduced from 12% to 5%.
• These measures will improve household nutrition, particularly benefitting women, children, and the elderly.

Fitness and Preventive Health

• GST on gyms and fitness centres reduced from 18% to 5%.
• Makes fitness more affordable for youth and working professionals.
• Complements the Fit India Movement and strengthens preventive healthcare.

No Concessions for Sin Goods: In line with the government’s strong commitment to fighting non-communicable diseases such as diabetes, obesity, and cancer, no tax cuts have been proposed on goods widely recognized as harmful, including tobacco products, pan masala, and sugary drinks.

The GST rationalization package reflects a balanced, citizen-centric approach to taxation. By lowering the burden on medicines, medical devices, nutrition, and insurance, while discouraging harmful consumption, the Government has taken a major step towards making healthcare more accessible, affordable, and preventive in nature.

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MV

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