GST on Medicines in India 2026: New Rates, HSN Codes and the Nil List

What is the GST rate on medicines after 22 September 2025?

Most medicines now carry 5% GST, which is 2.5% CGST plus 2.5% SGST within a state. Before 22 September 2025 the same medicines were mostly at 12%. A short list of life-saving drugs is nil-rated.

The 56th GST Council’s press release of 3 September 2025 announced three changes: “all other drugs and medicines” from 12% to 5%, 33 life-saving drugs from 12% to nil, and 3 life-saving drugs used for cancer, rare diseases and other severe chronic diseases from 5% to nil. Notification 9/2025-Central Tax (Rate) and Notification 10/2025-Central Tax (Rate), both dated 17 September 2025, put this into law from 22 September 2025.

Insulin and oral rehydration salts have their own 5% entry at serial 225. Medicine rates have not moved since. As of 7 November 2026, the notifications in force from 1 November 2026 after the 57th Council meeting, 02/2026 and 03/2026-Central Tax (Rate), amend the goods notifications only for fertilisers, retreaded tyres and psyllium seeds.

Which medicines are in the GST exempted medicine list?

The nil-rate list is Annexure I to Notification 10/2025-Central Tax (Rate), titled “List of drugs or medicines”. It has 37 entries: gene therapy plus the 36 drugs named in the Council’s press release.

These are mostly specialised drugs for cancer, rare genetic disorders and severe chronic conditions, not everyday tablets. Serial 113 of the exemption notification covers them under “30 or any other Chapter”, so the classification heading does not matter once the drug is on the list. Notification 9/2025 says the same from the other side: its 5% entries for drugs, and for drugs imported for personal use, exclude those “specified at nil” at serial 113.

• How to check a drug: match its generic name, not the brand, against Annexure I.
• Combination products: a combination is not nil-rated just because one ingredient is on the list; ask your CA.
• Downloadable list: searches for an “exempted medicine list pdf” lead to the same notification; use the CBIC copy, not a reposted table.

What is the GST on Ayurvedic and homeopathic medicine?

Ayurvedic, Unani, Siddha, homoeopathic and bio-chemic medicaments are at 5% from 22 September 2025. The Council’s list of goods moving from 12% to 5% names headings 3003 and 3004 including these systems.

Schedule I of Notification 9/2025 has three entries that matter here. Serials 233 and 234 cover medicaments under 3003 and 3004, “including Ayurvedic, Unani, Siddha, homoeopathic or Bio-chemic systems medicaments”. Serial 229 covers classical medicaments made exclusively to the formulae in the authoritative books listed in the Drugs and Cosmetics Act, 1940, or the recognised homoeopathic pharmacopoeias, and sold under the names given in those books. Serial 228 covers bio-chemic medicaments, including veterinary ones.

Herbal products sold as cosmetics or food, rather than as medicaments, fall under other headings with their own rates, so the label and licence matter.

What is the GST rate on medical devices and diagnostic kits?

Most medical devices are now at 5%. The Council moved diagnostic kits, glucometers, bandages and medical instruments from 12% to 5%, and medical thermometers and analysis instruments from 18% to 5%.

Not every hospital purchase is at 5%. Medical, surgical and dental furniture under 9402 sits in Schedule II at 18%, and X-ray apparatus not meant for medical uses is also outside the 5% entry. Check each item by heading, as a laptop or printer in the clinic is taxed under its own entry; see our guide to GST on laptops and printers.

Is there GST on medicines in a hospital bill?

For admitted patients, medicines used in treatment are generally treated as part of exempt health care. Medicines an out-patient buys at the hospital pharmacy are taxable sales at the product’s rate.

Health care by a clinical establishment is exempt under serial 74 of Notification 12/2017-Central Tax (Rate). CBIC’s Circular 32/06/2018-GST says food supplied to in-patients as advised by the doctor is part of a composite supply of health care. It does not mention medicines. A Tamil Nadu advance ruling applied the same reasoning to medicines and consumables issued to in-patients until discharge. It added that out-patients are free to buy elsewhere, so their medicines are separate taxable supplies.

An advance ruling binds only the applicant, so a hospital should take its CA’s view. Our post on GST on doctor and clinic services covers consultation fees, room rent and cosmetic procedures.

How should a chemist show GST on a medicine bill?

A registered chemist charges GST item by item at each product’s rate, so most lines show 2.5% CGST and 2.5% SGST, and nil-rated drugs show no tax. Where taxable and exempt goods go to an unregistered customer, Rule 46A allows one “invoice-cum-bill of supply” for both.

• HSN on the bill: under Notification 78/2020-Central Tax, 4 digits up to five crore rupees of turnover and 6 digits above; the smaller chemist may leave HSN off bills to unregistered customers.
• Registration: a supplier of goods only can stay unregistered up to forty lakh rupees of turnover under Notification 10/2019-Central Tax; Haryana is not among the states it excludes.
• Composition: a trader under Section 10 pays 0.5% central tax plus the same state tax on taxable turnover, but Section 10(4) bars it from collecting tax or claiming input tax credit.
• Nil-rated drugs and ITC: a nil-rated sale is an exempt supply under Section 2(47), so Section 17(2) limits credit on common costs to the taxable share.

A worked example in plain units: on a medicine line of 100 at 5%, the bill shows 2.5 CGST and 2.5 SGST, for 105 in all. A business buying test kits for its own use claims credit under the same rules as any other purchase, explained in our guide to GST invoices and ITC.

How DVM Techno Can Help

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