In a major reform the Finance Ministry has announced a sharp reduction in Goods and Services Tax (GST) on medical equipment and allied products. Effective from September 22, 2025, the GST rate on medical devices, diagnostic kits and essential healthcare items has been slashed from 12% to 5%.
The reduction applies not only to high-demand medical equipment but also to critical products such as packaged medicines, medical-grade oxygen, glucometers, thermometers, test strips, corrective spectacles and other healthcare essentials. The move is expected to bring down treatment costs for patients and ease the financial burden on hospitals and diagnostic centres.
This decision comes as part of the government’s broader GST overhaul which simplifies the tax structure by retaining only two main slabs—5% and 18%—and a special 40% rate for luxury and sin goods. Alongside this, the government has also announced full exemptions on life and health insurance premiums .
Officials have described the reform package as a “Diwali gift” for the common man designed to lower healthcare expenses, reduce inflationary pressure and stimulate demand across sectors. By easing the tax load on essential healthcare goods, the government hopes to make treatments more accessible and support the medical devices industry in expanding its reach.
Market analysts believe the cut will likely increase demand for medical equipment while improving affordability for millions of patients. Combined with insurance exemptions the move is expected to strengthen India’s healthcare ecosystem and address long-standing concerns of both providers and consumers.
