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Medicine prices set to drop from September 22 with GST cut, RDCA confirms new billing rates
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Peethaambaran Kunnathoor, Chennai
September 13 , 2025
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The Retail Distribution Chemists Alliance (RDCA) in Delhi, an affiliate of the AIOCD, has announced that from September 22, 2025, medicine prices across Delhi and other parts of India are set to fall significantly as the new GST 2.0 regime comes into effect.
The reduced GST rates will benefit patients directly, offering relief on both life-saving and commonly used medicines. RDCA has confirmed that its members will begin billing medicines at the new rates from the date of implementation.
Under the revised structure, GST on most pharmaceutical products has been slashed from 12 per cent to 5 per cent. This tax cut translates into substantial savings for patients. For instance, a medicine currently priced at Rs. 112 due to the 12 per cent tax will now be sold for Rs. 105. Products that previously attracted 18 per cent GST, such as nutraceuticals, will also be affected, with prices dropping from Rs. 118 to Rs. 105.
Sandeep Nangia, president of RDCA, stated, “This is a direct GST benefit to patients. Chemists are not offering discounts but simply passing on the benefit of reduced tax. We will also inform patients accordingly so there is full transparency.” RDCA believes this change will help improve access to medicines and reduce the financial burden on consumers.
Among the major changes, life-saving drugs will now be completely exempt from GST, previously taxed at 12 per cent. This is expected to have a meaningful impact on patients managing chronic or critical health conditions. Similarly, the Indian System of Medicines (ISM) will also see a GST reduction from 12 per cent to 5 per cent, offering broader affordability across traditional therapies.
Additionally, medical consumables like bandages, dressings, sutures, diagnostic kits, and blood products will benefit from the same 12 per cent to 5 per cent tax reduction. RDCA has welcomed these changes and believes that this reform aligns with the spirit of GST 2.0, making healthcare more accessible and affordable.
However, Nangia pointed out that the transition will not be without challenges, particularly for small chemists and distributors. Many retailers who purchased stock under the old tax regime will now be forced to sell at reduced rates, leading to direct losses. For example, medicines bought at Rs. 112 under 12 per cent GST must now be sold at Rs. 105, causing a Rs. 7 per unit loss.
To add to the strain, returns processed after September 22 will be credited at the new 5 per cent GST rate, even if the retailer paid 12 per cent or 18 per cent earlier. Nangia emphasized that while consumers benefit, small retailers need support to absorb these losses. “We are ready to serve the public, but the industry must also step in to ensure this change does not harm trade viability,” he added.
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