Medical device makers caution: Gradual GST cut needed, avoid disruption

The recent proposal to reduce the Goods and Services Tax (GST) on medical devices from 12% to 5% has triggered important concerns and suggestions from industry stakeholders. Rajiv Nath, Forum Coordinator of the Association of Indian Medical Device Industry (AiMeD), stresses that a sudden change could disrupt the healthcare supply chain. He recommends a transition period of 3–6 months, so existing stocks with pre-printed packaging and earlier MRP can be sold or consumed without the need for relabeling—a critical step to prevent supply shortages and financial losses for both manufacturers and distributors.

Nath points out that while reducing GST to 5% on high-value equipment like imaging devices and implants would boost affordability, applying the same rate to low-margin consumables such as syringes and catheters risks making Indian manufacturing less competitive. This could inadvertently encourage cheaper imports, hampering domestic industry growth. Currently, the GST structure is under review, with proposals to scrap the 12% slab, retain 5% and 18% slabs, and introduce a new 40% slab for specific goods. AiMeD suggests keeping 12% for most consumables and 5% for equipment, supporting both affordability and local manufacturing. They also urge for increased Health Cess on imports and streamlined GST refunds to mitigate the impact of any changes and ensure “Make in India” goals are not compromised.
MB Bureau