In a move set to benefit consumers and potentially boost demand in the health products sector, the GST Council has announced significant tax reductions on a range of daily essentials, including nutraceuticals and pharmaceuticals. The new tax structure introduces a two-tier rate system of 5% and 18%.
Nutraceutical Sector Benefits
The nutraceutical industry is poised for a significant shift as multivitamins and protein powders, previously taxed at 12% or 18%, will now fall under the 5% GST bracket. This reduction is expected to make these popular health supplements more affordable for consumers.
Pharmaceutical Sector Gains
The pharmaceutical sector has also received substantial tax relief:
33 lifesaving drugs: GST completely eliminated (previously 12%)
3 cancer and rare disease medications: GST removed (previously 5%)
Other drugs: GST reduced from 12% to 5%
This move is anticipated to significantly reduce the cost of essential medications, potentially improving access to critical treatments for patients across India.
Government’s Stance on Price Pass-through
Union Commerce Minister Piyush Goyal has urged manufacturers in both the nutraceutical and pharmaceutical sectors to ensure that the entire benefit of the GST reduction is passed on to consumers. Goyal emphasized that this price reduction could lead to substantial savings for consumers and potentially stimulate demand in these sectors.
Impact on Packaged Food Items
The GST cuts extend beyond pharmaceuticals and nutraceuticals, with packaged food items also seeing reductions. Products previously taxed at 12% or 18% will now be subject to a 5% GST rate, further alleviating the tax burden on essential consumer goods.
Implications for Industry and Consumers
These tax cuts are expected to have far-reaching implications:
Increased affordability of health supplements and essential medications
Potential boost in demand for nutraceutical and pharmaceutical products
Possible growth in the health and wellness sector
Enhanced access to lifesaving drugs and cancer treatments
As the new GST rates take effect, consumers can anticipate noticeable price reductions across a wide range of health-related products. The industry’s response to these changes and its ability to pass on the benefits to end-users will be crucial in realizing the full potential of these tax cuts.
The government’s move underscores its commitment to making healthcare more accessible and affordable for the Indian population, while also potentially stimulating growth in the nutraceutical and pharmaceutical sectors.
Source : scanx
