Medicines Are Lifelines, Not Luxury: AIOCD Seeks 5% GST on All Medicines, 0% on Life-Saving Drugs

Also Read: AIOCD Opposes Karnataka's Third-Party Pharmacy Inspection Plan, Warns of Legal, Data Risks

The AIOCD also sent copies of its memorandum and a separate letter to Hon’ble Deputy Chief Minister of Bihar and President of Council of Ministers, Shri Samrat Choudhary Ji, seeking his support.

Further, the AIOCD expressed confidence that the upcoming GST Council meeting will take a “compassionate, historic decision” to prioritize patients’ welfare over fiscal hardship.

Key Points of AIOCD Memorandum

• AIOCD, with 12.40 lakh chemists and distributors across India, appeals for listing all medicinal preparations, including prophylactics, in the 5% GST slab.

• AIOCD appreciates the Hon’ble Prime Minister’s announcement on 15th August for the rationalization of GST to benefit consumers.

•The Central Government listed 2817 formulations in essential medicines under DPCO 2013. 27 therapeutic areas are covered. The objective is to make medicines affordable. Over 90% of price-controlled medicines are currently in the 12% slab, with provisions of 16% retail margins.

• Prescriptions are generated with medicines and allied essentials such as probiotics, vitamins, nutritional & food supplements, and baby food should be included in the 5% GST slab.

• Critical & life-saving medicines (cancer, kidney, heart, chronic disorders, rare diseases, blood derivatives, controlled drugs, and birth control medicines) should be exempted. (0% GST slab).

• Ayurvedic medicines: widely used as primary, and a large segment of qualified doctors prescribed these medicines; need to protect from higher taxation due to abolition of 12% GST slab.

• Preventive & prophylactic medicines: supplements essential for prevention; higher taxation will discourage early health protection. "Prevention is better than cure" doctrine has been accepted worldwide.

• With the merger of the 12% slab, all medicines should be shifted either to the 0% or 5% GST slab to reduce burden on patients.This will reduce cost burden on those paying out of pocket; secondly, insurance premiums may also go down.

• Transitional and existing stock clarification: Clear guidelines are required for GST credit adjustment on stock purchased under higher slab.

• Public Welfare Governance: Reducing GST on medicines will ease the burden on patients paying out-of-pocket, support un insured citizens, and reflect the government’s commitment to health, dignity & well-being.

In the letter to Union Finance Minister Nirmala Sitharaman and the GST Council, the AIOCD urges to consider the following points to support the demand:

1. Central Government by Statue Order: DPCO regulates prices of essential medicines. 27 therapeutic disease areas have been covered. The current list of essential medicines consists of 2817 formulations, as per the available record on the website. The government objective is 'ensure Affordability, Avallability with reasonable prices."

2. All medicines and allied healthcare essentials, including probiotics, vitamins, nutritional supplements, food supplements, and baby food, which are invariably prescribed by doctors as part of patient treatment, must be listed under the 5% GST slab.

3. For patients battling critical and life-threatening ailments—such as cancer, kidney and heart diseases, chronic disorders, and rare conditions requiring blood derivatives and drugs under the controlled category—medicines should be treated as sacred instruments of survival and thus placed under the 0% GST bracket, including current drugs used for birth control, etc. (GST exempted category)

4. Our own trusted Ayurvedic medicines are widely used by millions of patients; any sudden additional taxation due to the abolition of the 12% tax slab may hit hard this segment of household treatment.

5. Prophylactic/preventive medicine: The world has accepted the doctrine of "Prevention is better than cure." Early diagnosis of probable ailment due to micronutrient deficiency can be well treated with supplements. This segment is picking up pace in India. The government needs to realize and support the public to remain healthy and not wait to fall sick and start treatment. Any additional tax burden on this segment would be disastrous in the long run.

6. At present medicines and medicinal preparations are listed in 0%, 5%, 12%, and 18% categories. Most of them are in 12%. The proposed 12% slab is being merged, then it's obvious all those formulations need to be listed in either the 0% or 5% GST slab.

7. We also request suitable guidelines through notification to be issued for the application of the revised GST rate against the stock purchase with the higher GST slab.