The Medical Devices industry in the country has welcomed the GST Council's recommendation to reduce the Goods and Services Tax (GST) rate of all medical devices to 5%, while raising concerns regarding various challenges regarding the GST refunds and transition to the new regime. They also called for swift and unambiguous implementation of the reform, for the benefit of the industry.
The Association of Indian Medical Device Industry (AiMeD), the umbrella association representing interest of over 1,800 manufacturers of medical devices across India, has welcomed the decision to rationalize GST rates and simplify the compliance framework, saying it will ease working capital constraints, lower costs for consumers, and strengthen India’s competitiveness in the global MedTech sector.
Rajiv Nath, forum coordinator, AiMeD, said:“We welcome the path-breaking decision to reduce GST from 12% to 5% if refund on accumulated GST due to the inverted GST structure will be made within 7 days as being informed, as our inputs are usually at 18% leading to accumulated GST credit blocking our working capital. We hope GST refunds will also be made available on GST paid on Services & Capital Goods as is the case in other progressive countries like Australia, Singapore & Canada etc to enable us to be globally competitive".
"We also hope a transition period is provided to switch packaging material to avoid persecution under anti-profiteering measures though we do intend to pass on the GST reduction benefits to the end consumers by reducing MRP proportionately,” he added
Pavan Choudary, chairman, MTaI said, “These measures will expand the reach of diagnostics and medical devices that have benefited from concessional levies. The reduced insurance outgo and lower prices of medical supplies will especially benefit the elderly, which is a matter of great satisfaction for us.”
The 56th GST Council meeting approved a two-tier structure of 5% and 18%, with a 40% rate for sin goods, effective from September 22, 2025. The reforms also include: Risk-based provisional refunds: 90% of refund claims under the inverted duty structure (IDS) to be sanctioned provisionally on similar lines as zero-rated exports. Pending legislative amendments, CBIC will issue instructions to operationalize this measure from November 1, 2025.
The reforms, if swiftly implemented, will provide liquidity relief to domestic manufacturers, enable greater affordability of medical devices for patients, and support the government’s vision of making India a global hub for affordable and high-quality medical devices.
The Association of Diagnostics Manufacturers of India said the it welcomes the reform as a decisive boost for affordable healthcare and for India’s MedTech and IVD ecosystem.
Jatin Mahajan, president, Association of Diagnostics Manufacturers of India and managing director, J Mitra & Company said, "Bringing medical devices, including diagnostic equipment and test kits, into a uniform 5% slab, alongside zero GST on health and life insurance and relief on essential medicines, will meaningfully cut out-of-pocket costs for patients and accelerate screening, early detection, and treatment across India. Equally important, a simpler two-rate structure reduces compliance friction, eases working-capital pressures, and encourages investment in quality, R&D, and export readiness, which are key pillars of ‘Make in India’ for diagnostics."
He urged quick, unambiguous implementation with clear notifications, HS code alignment, and prompt refunds so benefits flow immediately to hospitals, labs, and citizens. Industry stands ready to pass through the gains, expand access to POCT and advanced immunoassays, and build globally competitive manufacturing at scale. This is a timely, growth-friendly reform that advances both public health and India’s ambition to be a trusted IVD and medical-technology hub.”
Welcoming the reform, Dr. GSK Velu, chairman & managing director, Trivitron Healthcare, Neuberg Diagnostics and Maxivision Super Speciality Eye Hospitals said, "... if the well intended reforms on GST reforms and resolution to inverted duty structure is well implemented it will benefit all industries and will ensure desired benefit reaches end consumers," he added.
Himanshu Baid, managing director, Poly Medicure Ltd said that the progressive reform will directly benefit patients by lowering treatment costs, improving affordability, and expanding access to essential medical technologies. It is a transformative step that will strengthen India’s healthcare system and advance the vision of affordable healthcare for all.
The Union finance ministry, while announcing that the rate of 5% applies on all medical devices, instruments, apparatus used in medical, surgical, dental and veterinary uses other than that are exempted specifically, clarified, "This measure does not create any new inverted duty structure as the existing structure already had inverted duty structure although this measure may deepen the inversion. However, under GST, refund of accumulated input tax credit arising on account of inverted duty structure is available to manufacturers".
GST Council has also recommended process reforms to enable expedited refunds. The measure is intended to lower the cost of healthcare and thereby benefit patients, particularly the poor, said the Ministry.
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