If you are a business owner dealing with medicines and other pharmaceuticals, you must be wondering about the GST rates applicable to your products. In this article, we will answer some of the most frequently asked questions (FAQs) about GST rates on medicines and other pharmaceuticals.
GST or Goods and Services Tax is a single indirect tax levied on the supply of goods and services in India. It replaced multiple indirect taxes such as excise duty, service tax, VAT, etc., and has simplified the tax structure in the country.
The GST rate on medicines and other pharmaceuticals is 12%. However, certain lifesaving drugs and medical devices are exempted from GST.
Essential medicines are those that are considered to be necessary for the basic healthcare needs of the population. These medicines are included in the National List of Essential Medicines (NLEM) and are subject to price control by the government. Non-essential medicines are those that are not included in the NLEM and are subject to market forces.
No, essential medicines are not exempt from GST. However, the GST rate on essential medicines is lower at 5%.
The GST rate on medical devices varies depending on the type of device. Here are the GST rates on some commonly used medical devices:
- Artificial limbs and hearing aids: 5%
- Stents and pacemakers: 5%- X-ray films: 12%
- Syringes and needles: 12%
- Spectacles and contact lenses: 18%
Yes, GST is applicable on imported medicines and medical devices. The GST rate applicable is the same as that on domestically produced medicines and medical devices.
Yes, you can claim input tax credit (ITC) on medicines and medical devices used in your business. However, ITC cannot be claimed on medicines and medical devices used for personal consumption or for providing free medical aid.
To calculate the GST payable on your medicines and medical devices, you need to multiply the taxable value of your goods by the GST rate applicable. For example, if the taxable value of your medical device is Rs. 1000 and the GST rate applicable is 12%, the GST payable would be Rs. 120.
In conclusion, the GST rate on medicines and other pharmaceuticals is 12%. Essential medicines are subject to a lower GST rate of 5%, while certain medical devices are exempted from GST. Input tax credit can be claimed on medicines and medical devices used in your business, and the GST payable can be calculated by multiplying the taxable value of your goods by the applicable GST rate.
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