New Delhi, Aug 26 (IANS) — The Association of Indian Medical Device Industry (AiMeD) has urged policymakers to adopt a balanced approach while revising the Goods and Services Tax (GST) rates on medical devices, warning that abrupt changes could harm domestic competitiveness.
Currently, most medical devices attract a 12 per cent GST, whereas inputs are taxed at 18 per cent, leading to an inverted duty structure and squeezing margins. AiMeD cautioned that the proposals to move GST rates either down to 5 per cent or up to 18 per cent could both have unintended consequences if not carefully designed.
“For equipment, electronics, reagents and implants, a lower GST rate of 5 per cent would improve affordability and widen market access. However, applying the same rate to low-margin consumables like syringes, catheters and IV sets would worsen the inverted duty structure, raising costs for local manufacturers and giving imports an edge,” said Rajiv Nath, Forum Coordinator of AiMeD.
He recommended retaining the 12 per cent GST on most consumables while applying a 5 per cent rate selectively on high-value devices. AiMeD also called for faster GST refunds and extending refund eligibility to input services and capital goods to improve cash flow for domestic players.
“Raising GST to 18 per cent would make devices costlier for hospitals and patients, while a blanket 5 per cent rate without refund reforms risks supply disruptions by disincentivising local production. A nuanced GST structure is needed to balance affordability with industry viability,” Nath said.
AiMeD further suggested doubling the health cess on imports from 5 per cent to 10 per cent, with the additional revenue channelled into Ayushman Bharat, to help neutralise the price advantage of imports.
“Indian manufacturers already face about 15 per cent cost disadvantages compared to imports from China and ASEAN nations. GST reforms should strengthen Make in India, not undermine it,” Nath added.
A calibrated GST regime, AiMeD believes, can support patient affordability, protect consumer interests, boost domestic production and advance the government’s vision of Atmanirbhar Bharat.