The introduction of the new GST slabs for healthcare products in India from September 22, 2025, is one of the major steps towards making healthcare affordable and accessible. The reform exempts health and life insurance fully under GST, while allowing several medical devices, diagnostic kits, and essential medicines to be taxed at 5%, with over 30 life-saving drugs moved to the 0% (nil) list.
Key Changes in GST for Healthcare
In this regime, only two slabs exist for most goods and services: 5% and 18%; the well-known 40% slab is reserved for purposes of luxury and sin. For healthcare, the focus is solely on reducing tax burdens on critical items, enabling wider coverage and lower out-of-pocket costs for citizens.
New vs Old GST Rates: How Much You Save on Healthcare
| Item / Service | Old GST Rate | New GST Rate | Direct Saving for Public |
| Health Insurance Premium | 18% | 0% | 18% cheaper |
| Life Insurance Premium | 18% | 0% | 18% cheaper |
| Life-saving Medicines | 12% | 0% | 12% cheaper |
| Other Medicines (Ayurveda, Homoeopathy, etc.) | 12% | 5% | 7% cheaper |
| Medical Devices & Diagnostic Kits | 12–18% | 5% | 7–13% cheaper |
| Corrective Spectacles (Glasses) | 28% | 5% | 23% cheaper |
| Medical Oxygen, Thermometers | 12–18% | 5% | 7–13% cheaper |
How does the general public get benefits?
- Insurance Without Tax Burden: Individual health and life insurance policies are now GST-free, making premiums much lower and boosting financial protection for families. A typical family will save the entire 18% GST previously charged, making coverage much more accessible.
- Affordable Medicines and Treatment: Life-saving drugs and essential chronic therapies now come with no GST, with other medicines taxed at a modest 5%. This brings immediate, direct relief in treatment costs—critical for families dealing with chronic diseases or rare illnesses.
- Lower Diagnostic and Medical Equipment Costs: The drop to 5% GST on devices such as thermometers, glucometers, and test kits makes healthcare infrastructure and diagnostics significantly cheaper, promoting preventive care and timely detection.
- Wider Healthcare Access: By reducing tax rates, the reforms support domestic manufacturing, drive local consumption, and help make products and services which were earlier unaffordable, accessible to the masses.
Conclusion
With the 2025 new GST slab, affordability and accessibility in healthcare have dramatically improved. This reform reduces the treatment burden for millions and encourages a healthier, insured society—all while supporting government visions for insurance and healthcare for all by 2047.
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