New Delhi, September 3, 2025: The Association of Diagnostics Manufacturers of India (ADMI) has called on the Union Finance Minister and Chairperson of the GST Council, Smt. Nirmala Sitharaman, to rationalize the Goods & Services Tax (GST) rate on In-Vitro Diagnostic (IVD) equipment, kits, and reagents to a uniform 5%, in line with their critical role in public health and essential healthcare delivery.

Currently, IVD equipment attracts 18% GST, while reagents are taxed at 12%, with a few exceptions at 5%. ADMI highlighted that this inverted duty structure not only escalates diagnostic costs for patients but also undermines India’s ambition of affordable healthcare and domestic manufacturing under the ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives.

Key Justifications by ADMI:

• Public Health Imperative: Diagnostics are the first line of care for both communicable and non-communicable diseases. A higher GST rate increases the cost of testing, discouraging early diagnosis and timely treatment. Affordable diagnostics are vital to reduce the long-term burden of diseases like diabetes and cardiovascular conditions.

• Industry & Economic Rationale: Though IVD contributes less than 2% of the overall medical device market, it is indispensable to clinical workflows. Nearly 65% of IVD products are imported. Rationalizing GST will support domestic manufacturers, complement the Production Linked Incentive (PLI) Scheme, and reduce import dependency.

• Policy Consistency: Medical implants and appliances already attract 5% GST, and Imaging Diagnostics has been proposed at the same rate. Extending parity to IVD products ensures fairness, simplifies compliance, and eases working capital pressures for MSMEs and diagnostic labs.

Proposed Calibrated Approach:

• A uniform 5% GST rate on IVD equipment and reagents.

• Introduction of a Health Cess on imports to safeguard domestic manufacturing.

• A time-bound GST refund mechanism for input tax credits to ease liquidity constraints while ensuring revenue neutrality.

ADMI also submitted a list of relevant HSN codes with current and proposed GST rates, calling for immediate rationalization to align with essential healthcare priorities.

Speaking on the matter, Rajat Kapoor, Assistant Director – Secretariat, ADMI, said:
“Affordable diagnostics are the foundation of preventive and effective healthcare. Rationalizing GST on IVD products to 5% will not only make testing accessible for every citizen but also strengthen India’s diagnostic manufacturing ecosystem in line with the government’s self-reliance vision.”

ADMI has urged the Hon’ble GST Council to favourably consider this representation in the larger public interest and ensure sustainable growth of the Indian diagnostic sector.