Medical Device Industry Welcomes GST Reforms
New Delhi, September 4: The Association of Indian Medical Device Industry (AiMeD) has welcomed the GST Council’s landmark decision to rationalize GST rates and simplify the compliance framework, saying it will ease working capital constraints, lower costs for consumers, and strengthen India’s competitiveness in the global MedTech sector.
The 56th GST Council meeting approved a two-tier structure of 5% and 18%, with a 40% rate for sin goods, effective from September 22. The reforms also include risk-based provisional refunds, where 90% of refund claims under the inverted duty structure (IDS) will be sanctioned provisionally on similar lines as zero-rated exports. Pending legislative amendments, the CBIC will issue instructions to operationalize this measure from November 1, 2025. Additionally, the reforms aim to improve ease of compliance through faster registration within three days for low-risk taxpayers, simplified return filings, and pre-filled return formats to reduce administrative burden.
Welcoming the move, Rajiv Nath, Forum Coordinator, AiMeD, said: “We welcome the path-breaking decision to reduce GST from 12% to 5% if refund on accumulated GST due to the inverted GST structure will be made within 7 days as being informed, as our inputs are usually at 18% leading to accumulated GST credit blocking our working capital. We hope GST refunds will also be made available on GST paid on Services & Capital Goods as is the case in other progressive countries like Australia, Singapore & Canada etc to enable us to be globally competitive.”
He adds, “We also hope a transition period is provided to switch packaging material to avoid persecution under anti-profiteering measures though we do intend to pass on the GST reduction benefits to the end consumers by reducing MRP proportionately.”
According to Dr Rajiv Chhibber, Joint forum Coordinator AIMED, “This progressive step will immensely benefit the healthcare ecosystem by simplifying taxation, reducing compliance burdens, and streamlining supply chains – enabling companies to operate with greater efficiency and transparency.”
AiMeD noted that the reforms, if swiftly implemented, will provide liquidity relief to domestic manufacturers, enable greater affordability of medical devices for patients, and support the government’s vision of making India a global hub for affordable and high-quality medical devices.
