Medicines, medical devices to get cheaper from Sept 22 under new GST regime

The government has directed all pharma companies to revise the MRP of medicines, formulations and medical devices with effect from September 22, 2025 under the new GST regime. The National Pharmaceutical Pricing Authority affirmed that the benefit of reduction in GST rates shall be passed on the consumers/patients.

The government has urged pharma companies to issue a revised price list or a supplementary price list, to the dealers, retailers, State Drug Controllers and the Government reflecting the revised GST rates and Revised MRP.

The ministry, via its notice, has ordered manufacturing and marketing companies to take immediate measures to sensitise dealers/retailer/consumers about reduction in GST rates through all possible channels of communication including electronic, print and social media.

The notice clarifies that companies need not recall, re-label or restick the label of container or pack of stocks which is already released in the market prior to September 22, if they are able to ensure price compliance at the retailer level through other measures.

The governing body has suggested that industry associations may also release advertisements in leading national newspapers including vernacular newspapers to reach out the dealers/retailers to ensure compliance of revised GST rates.

The Ministry of Chemicals and Fertilizers issued a notification on Friday since drugs pricing and packaging is outside the preview of legal metrology, which is applicable for FMCG products.The 56th GST Council Meeting held on September 3, 2025, recommended major reforms in the GST rates across categories. The council recommended slashing of GST rates on major drugs from 5% to nil. The drugs, earlier charged under 12% slab are not shifted to 5%.Wadding, gauze, bandages and similar articles (for example, dressings, adhesive plasters, poultices), impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes will now be taxed 5%, down from the previous 12% GST rate.

Medicines used to cure cancer and asthma have also been shifted to 5% GST slab from 12% charged earlier.

The government has slashed the GST rates on most of the products, including talcum powder, face powder, hair oil, shampoo, dental floss, toothpaste, toilet soap, shaving cream, shaving lotion and after shave lotion from 18% to 5%.