Starting September 22, 2025, medicines under the 5% GST slab will be exempt from GST, making them cheaper, as per NPPA’s new directive to pharmaceutical companies.
In a significant move aimed at reducing the financial burden on patients, the National Pharmaceutical Pricing Authority (NPPA) has announced that medicines and medical devices falling under the 5 per cent GST slab will now be exempted from GST, effective September 22, 2025. Following the 56th GST Council meeting, the new directive mandates all pharmaceutical manufacturers and marketers to reflect the revised tax rates in their product pricing and pass on the benefits to consumers.
NPPA issues directive to pharma companies
The NPPA has instructed all drug and medical device manufacturers and marketing firms to revise the Maximum Retail Price (MRP) of their products from September 22 to reflect the reduced GST rates. The authority emphasised that the benefit of the GST cut must reach consumers and patients without delay.
“Manufacturers and marketing companies must issue a revised or supplementary price list indicating the new GST rates and updated prices,” the NPPA stated in its order. These lists must be shared with dealers, retailers, state drug controllers, and relevant government bodies.
Public awareness campaigns recommended
To ensure transparency and widespread awareness, the NPPA urged companies to utilise electronic, print, and social media platforms to inform the public about the price reductions due to the GST changes. Industry associations have also been encouraged to publish advertisements in local language newspapers and major national dailies to reach retailers and consumers across the country.
Stock already in market not to be recalled
Clarifying compliance measures, NPPA said that if companies can ensure price compliance at the retail level through these awareness initiatives, there will be no need to recall, relabel, or re-sticker existing stock already distributed in the market before September 22.
Key GST changes
- Medicines in the 5% GST slab will now attract 0% GST.
- Drugs previously taxed at 12% remain unaffected.
The NPPAโs directive is part of a broader effort to make essential medicines more affordable and accessible, especially in the wake of rising healthcare costs. With the new GST structure taking effect soon, patients can expect lower prices on several life-saving drugs and medical products across the country.
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