Medicine Prices to Decline from September 22 with New GST Regime Across India

From September 22, 2025, medicine prices across Delhi and other parts of India will fall as the new Goods and Services Tax (GST) changes come into effect, the Retail Distribution Chemists Alliance (RDCA) confirmed.

Under the revised structure, GST on most pharmaceutical products will be reduced from 12 per cent to 5 per cent. This adjustment applies to both life-saving medicines and commonly used drugs. Products that earlier attracted 18 per cent GST, such as certain nutraceuticals, will also see a drop; a product priced at ₹118 under 18 per cent GST will now sell for ₹105.

Life-saving drugs will become entirely exempt from GST, whereas earlier they were taxed at 12 per cent. Traditional therapies under the Indian System of Medicines (ISM) will see their GST rate fall from 12 per cent to 5 per cent. Medical consumables, including bandages, dressings, sutures, diagnostic kits, and blood products will also benefit from the cut from 12 per cent to 5 per cent.

Sandeep Nangia, president of the RDCA, stated that the reduction is a direct benefit to patients; chemists will not offer discounts but will pass on the benefit due to the lower tax rate. RDCA plans to inform consumers clearly about the new pricing so there is transparency.

However, the RDCA expects that the transition will pose challenges to small chemists and distributors. Some retailers who have purchased stock under the old GST rates will have to sell them at lower rates, leading to losses. For example, a medicine bought at ₹112 under the 12 per cent GST rate would now need to be sold at ₹105, which means a loss of ₹7 per unit.

Additionally, returns processed after September 22 will be credited at the new 5 per cent GST rate, even if the items were bought under 12 or 18 per cent earlier.

Additionally, returns processed after September 22 will be credited at the new 5 per cent GST rate, even if the items were bought under 12 or 18 per cent earlier.

The revised GST structure is expected to make essential medicines and consumables more affordable for patients while simultaneously posing short-term operational and financial challenges to retailers and distributors during the transition period.

(Rh/Eth/TL/MSM)