GST Breakthrough: Gene Therapy Becomes Tax-Free
New Delhi: Patients battling cancer and rare diseases are expected to take a sigh of relief as the Government of India has exempted gene therapy from Goods and Services Tax (GST).
This exemption is part of Notification No. 02/2025 - Central Tax (Rate), issued on January 16, 2025, by the Ministry of Finance and published in the Gazette of India, Extraordinary. The notification amends the earlier Notification No. 2/2017 - Central Tax (Rate), adding gene therapy to the GST exemption schedule under a new entry, "105A. 30 Gene Therapy."
This change has been made under the provisions of sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), based on the recommendations of the GST Council. The government, satisfied that it is necessary in the public interest, has taken this step to improve the affordability of advanced medical treatments.
Earlier, GST on gene therapy was set at 12 percent.
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Additionally, the notification updates the definition of "pre-packaged and labelled" goods. It specifies that these are commodities intended for retail sale, with packaging not exceeding 25 kilograms or 25 liters. Such products must comply with the Legal Metrology Act, 2009, and its rules, ensuring that all required declarations are securely affixed to the packaging. This clarification is designed to streamline the application of GST exemptions for medical products.
The exemption has been implemented with immediate effect and builds upon the foundational Notification No. 2/2017 - Central Tax (Rate), dated June 28, 2017, which has undergone several amendments over the years. The last amendment was made via Notification No. 3/2024 - Central Tax (Rate), dated July 12, 2024.
