FMRAI Demands GST Abolition on Medicines: Here’s Why It Matters
The Federation of Medical and Sales Representatives’ Associations of India (FMRAI) has renewed its demand for GST abolition on medicines to make healthcare more affordable. They argue that taxing essential drugs burdens patients, especially during times of rising healthcare costs.
In this blog, let’s break down:
- How GST affects medicine prices
- The legal basis for taxing medicines
- FMRAI’s key demands
- Expert insights on what this means for you
How Does GST Impact Medicine Prices?
Under India’s GST regime:
- Medicines attract 5% GST (for essential drugs) or 12% GST (for other formulations).
- Before GST, medicines were subject to VAT and excise duty; GST replaced these with a uniform tax.
Example:
| Item | Pre-GST Tax | GST Rate | Impact |
|---|---|---|---|
| Essential Medicines | 4-5% VAT + Excise | 5% | Minimal change |
| Other Medicines | Varies | 12% | Slightly higher cost |
(Source: CBIC GST Rates Notification No. 1/2017-CT(Rate))
What Does FMRAI Want?
FMRAI’s recent resolution includes:
✅ Complete removal of GST on all life-saving medicines
✅ Zero-rated tax treatment to prevent input cost cascading
✅ Price control mechanisms for affordable drug supply
✅ Stronger checks on pharma profit margins
The organisation submitted a detailed memorandum to the Finance Ministry ahead of the next GST Council meeting.
Legal Basis for GST on Medicines
- Section 9, CGST Act 2017: Imposes GST on supply of goods, including medicines.
- HSN Codes: Medicines fall under Chapter 30 of the HSN classification.
Relevant Notifications:
- Notification No. 1/2017-Central Tax (Rate) dated 28.06.2017 (and subsequent amendments)
- Latest rate changes can be checked on cbic.gov.in
Expert Tip: How Can Patients Minimise Medicine Costs?
💡 Tip: Always check if your local pharmacy offers generic versions — they are medically equivalent and often 30–80% cheaper. Also, government-run Jan Aushadhi stores provide medicines at subsidised rates.
Will GST Be Removed on Medicines?
While FMRAI’s demand highlights valid affordability concerns, the final decision lies with the GST Council. Any rate change requires Council consensus and an official notification.
FAQs on GST for Medicines
Q1. Is there GST on life-saving drugs?
Yes, but essential life-saving drugs attract a lower 5% GST rate.
Q2. Are generic medicines taxed?
Yes, generic medicines fall under the same rate slabs as branded ones.
Q3. Can GST be claimed back by consumers?
No, only registered businesses can claim GST input credits, not patients.
Key Takeaway & Next Steps
The demand to abolish GST on medicines aims to ease patient costs but needs a policy-level change. Efiletax will keep you updated on any official decisions by the GST Council.
👉 Need help with GST compliance or input tax credit claims for your pharmacy or business? Contact Efiletax today!
Summary
FMRAI demands GST abolition on medicines to cut costs for patients. Know current rates, legal rules, and what the demand means for India’s healthcare.