Govt Allows Stickering, Orders New MRPs Post GST Reduction, AiMeD Welcomes Directive

Following the GST Council’s decision in its 56th meeting to reduce Goods and Services Tax (GST) rates on medicines and medical devices effective 22nd September 2025, the government has issued a series of directions to ensure that the benefit is passed on to consumers without disruption of supply.

With these coordinated directives, the government has covered the entire chain: from price reduction orders (NPPA), to permissions for updating old stocks (CDSCO to companies), to speedy regulatory approvals (CDSCO to States/UTs).

Regarding the above, addressing concerns over existing stocks for operational clarity, the Central Drugs Standard Control Organisation (CDSCO) issued two circulars on 11th September 2025. In one, it permitted manufacturers and importers of drugs and medical devices to affix stickers or re-label packs with revised MRPs reflecting the GST reduction, under Rule 104A of the Drugs and Cosmetics Rules, 1945. It also mandated that a declaration of revised MRPs must be submitted to the concerned licensing authority within three months from the date of the order.

The circular read,

"In this regard in exercise of. the powers conferred under the Drugs and Cosmetics Act, 1940 and rules thereunder, the Central Licensing Authority (CLA) has no objection to affix sticker of the revised Meximum Retail Price (MRP) by the importers as well as manufacturers of class C and Dhedical devices for implementation of GST within 3 months from the date of this order."

In another circular issued the same day, CDSCO wrote to all State and UT Drug Controllers, directing them to expedite approvals for stickering or re-labelling requests from drug and medical device manufacturers.

The circular addressed all State and UT Drug Controllers and said,

"In this regard, you are requested to expedite the process of issuance of no objection for alteration of label (stickering) by the manufacturers under relevant rules made under Drugs and Cosmetics Act, 1940 for implementation of GST."

In line with the above, the National Pharmaceutical Pricing Authority (NPPA) has ordered all manufacturers and marketing companies to revise Maximum Retail Prices (MRPs) in line with the GST reduction and issue updated price lists to retailers, dealers, and regulators. Companies must also launch awareness campaigns to inform stakeholders and consumers.

In this regard, the following directions are issued:

i. The benefit of the reduction in GST rates shall be passed on to the consumers/patients effective from 22nd September, 2025.

ii. All the manufacturers /marketing companies selling drugs/formulations shall revise the MRP of drugs/formulations (including medical devices) accordingly, with effect from 22nd September, 2025.

iii. The manufacturer/marketing companies shall issue a revised price list or supplementary price list, in Form V/VI, to the dealers, retailers, State Drug Controllers, and the Government reflecting the revised GST rates and Revised MRP.

iv. Manufacturer/marketing companies shall take immediate measures to sensitise dealers/retailers/consumers about the reduction in GST rates through all possible channels of communication, including electronic, print, and social media. Industry associations may also release advertisements in leading national newspapers, including vernacular newspapers, to reach out to the dealers/retailers to ensure compliance with revised GST rates w.e.f. 22nd September,2025.

v. It is clarified that recalling, re-labelling, or re-stickering on the label of a container or pack of stocks released in the market, prior to 22nd September, 2025, is not mandatory, if manufacturer/marketing companies are able to ensure price compliance at the retailer level through measures mentioned above.

vi. However, the manufacturer/marketing companies who desire to re-label or re-sticker the stock available in the market, may do so in a phased manner so that it does not cause a shortage of drugs/formulations (including medical devices) in the market.

Welcoming the move, the Association of Indian Medical Device Industry (AiMeD) thanked the government for allowing a three-month transition until 31 December 2025 for relabeling but requested additional exemptions for physical relabeling, particularly for low-priced, high-volume medical disposables.

It said, "To prevent supply chain disruptions in the critical healthcare sector in case of a GST reduction, we thank the Government of India for considering to allowing a 3-month transition period till December 31st for relabeling; however, we seek additional exemption of physical relabelling where it's difficult for low-priced, high-volume medical disposables."

Furthermore, it noted, "This would enable the sale or use of existing pre-printed packaging and stock with prior MRPs without requiring relabeling. Since it is not feasible to apply stickers to billions of low-priced disposable medical devices, manufacturers could post revised, lower MRP rates on their websites and issue circulars to dealers and trade channel partners as well as use other alternative social media means to educate consumers. Retailers could then be requested to sell products at the reduced MRP based on the new GST rate (AIOCD has assured)."

In addition, AiMeD requested, "Your revised labeling guidelines that permit relabeling on a voluntary basis on price MRP printed packaging during the transition bill the stocks of earlier MRP as they are depleted as per any of the above alternatives, as different solutions may be feasible for different levels of manufacturer. This will safeguard the competitiveness of Indian medical device manufacturing. ensuring that health sector reforms also drive industry growth and lower cost gains by consumers."

In addition to the above, Rajiv Nath, Forum Coordinator, AiMeD (Association of Indian Medical Devices Industry), told Medical Dialogues, "This is a timely and pragmatic step by the government that addresses an important operational challenge faced by retailers, manufacturers, importers, and distributors whenever GST rates are revised. The provision ensures compliance and consumer transparency and prevents wastage of packaging material while also safeguarding the industry against undue stock losses. We appreciate that the Government has struck the right balance between protecting consumer interests and supporting industry ease of doing business."

Further, he added, "The allowance to use existing packaging material by DoCA till 31st December 2025 is a cost-saving, very welcome measure that will benefit MSMEs and reduce unnecessary waste. We urge all industry members as well as our channel partners and stakeholders to strictly comply with the guidelines and issue prompt public notifications to ensure transparency and consumer trust."

To view the official notice, click the link below: