NPPA directs pharma, medical devices industries to implement GST cut
The National Pharmaceutical Pricing Authority (NPPA) has directed the pharma and medical devices industry to pass on the benefit of Goods and Services Tax (GST) reduction to the consumers by revising the Maximum Retail Price (MRP) with effect from September 22, 2025.
The manufacturers and marketing companies shall issue revised price list or supplementary price list in Form V or VI to the dealers, retailers, State Drugs Controllers and the government reflecting the revised GST rates and revised MRP.
The decision follow the GST Council's recommendations regarding the rationalisation of GST rate structures, wherein GST rates of drugs, formulations and medical devices have been reduced.
"Manufacturers/marketing companies shall take immediate measures to sensitize dealers/retailer/consumers about 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 the dealers/retailers to ensure compliance of revised GST rates with effect from 22nd September, 2025'" said the pricing authority in an office memorandum.
In a relief to the industry, the authority clarified that recalling, re-labelling or re-stickering on the label of container or pack of stocks released in the market prior to September 22 is not mandatory, id manufacturer or marketing companies are able to ensure price compliance at the retailer level through measures mentioned by the NPPA.
"However, the manufacturer/marketing companies who desire to re-label or re-sticker the stock available in the market, may do soon a phased manner so that it does not cause shortage of drugs/formulations (including medical devices) in the market," said the price regulator referring to the directions provided by the Central Drugs Standard Control Organisation (CDSCO) on September 11, on this regard.
The drug regulator has asked the State and Central drug regulators to take steps to expedite the process of issuance of 'no objection' approvals for the medicine manufacturers in the country to change their price labels in tune with the recent rationalisation of Goods and Services Tax for medicines.
For medical devices, the Central Licensing Authority (CLA) has said that it has no objection to affixing stickers of the revised Maximum Retail Price of class C and D medical devices in line with the GST rationalisation, within three months.
In a communication to the drug controllers in all the States and Union Territories (UTs), the CDSCO, under the Directorate General of Health Services, sought, "...you are requested to expedite the process of issuance of no objection for alteration of label (stickering) by the manufacturers under relevant rules made there under Drugs and Cosmetics Act, 1940 for implementation of GST".
"Action taken in the matter may be communicated to this Directorate," it added.
On the stickering of revised prices on medical devices, the authority issued an order dated September 11, stating, ".... the Central Licensing Authority (CLA) has no objection to affix sticker of the revised Maximum Retail Price by the importers as well as manufacturers of class C and D medical devices for implementation of GST within 3 months from the date of this order."
It may be noted that the 56th meeting of the GST Council held in New Delhi under the chairpersonship of the Union finance & corporate affairs minister Nirmala Sitharaman has recommended reduction of Goods and Services Tax rate for all drugs and medical devices to 5%, and waiver of GST for 36 lifesaving drugs.
The Council also recommended reduction of GST from 18% to 5% on various medical apparatus and devices used for medical, surgical, dental or veterinary usage or for physical or chemical analysis and reduction of GST from 12% to 5% on various medical equipment and supplies devices such as wadding gauze, bandages, diagnostic kits and reagents, blood glucose monitoring system (Glucometer) medical devices, etc.
