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New Delhi, 4th September 2025 — The 56th meeting of the GST Council has unveiled significant reforms affecting the health sector, aimed at making healthcare affordable for the common man and expanding insurance coverage across the country. These changes will come into effect from 22nd September 2025.
Key highlights of the GST changes in the health sector include:
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Exemption of GST on all individual life insurance policies (including term life, ULIP, endowment) and all individual health insurance policies (including family floater and senior citizen policies) along with their reinsurance, promoting greater insurance accessibility for citizens.
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Major tax relief on medicines, with the GST rate reduced from 12% to NIL on 33 lifesaving drugs, and from 5% to NIL on 3 critical drugs used for cancer, rare diseases, and other severe chronic conditions.
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For other drugs and medicines, the GST rate has been reduced from 12% to 5%, easing the cost burden for patients and the healthcare system.
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A wide range of medical apparatus and devices used for medical, surgical, dental, or veterinary purposes, or for physical or chemical analysis, will see the GST rate cut from 18% to 5%.
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Various medical equipment and supplies such as wadding, gauze, bandages, diagnostic kits and reagents, and blood glucose monitoring systems (glucometers) will now attract GST at 5% instead of 12%, making essential medical supplies more affordable.
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Additionally, beauty and physical well-being services like gyms, salons, barbers, and yoga centres used by the common man will benefit from a reduction in GST from 18% to 5%.
These strategic GST reductions and exemptions are a part of the Government’s citizen-centric approach to make healthcare and related services affordable amidst growing health needs. The reforms also reflect an effort to rationalize the GST rate structure across sectors, easing compliance for stakeholders.
The GST Council also emphasized operationalizing the GST Appellate Tribunal (GSTAT) for better dispute resolution by the end of this year, ensuring enhanced trust and transparency in the GST framework.
The government expects these reforms to significantly enhance the quality of life and economic well-being of Indian citizens by lowering the cost of essential health insurance, medicines, medical devices, and well-being services.
This detailed GST update marks a substantive step towards inclusive health affordability under the new GST regime.
