Key points
- Since 22 September 2025, most medicines are at 5% GST.
- A list of life-saving drugs is at nil.
- Other items you sell, like cosmetics or devices, may have different rates.
- Medicine prices usually include GST; software must work backwards.
- Set the rate and HSN on each item once.
GST rates in a medical store
| Item | Typical rate since 22 Sept 2025 |
|---|---|
| Most medicines (allopathic, ayurvedic, homeopathic) | 5% |
| Notified life-saving drugs | Nil |
| Many medical devices, diagnostic kits, glucometers | 5% |
| Corrective spectacles | 5% |
| Personal care items like soap, shampoo, toothpaste | Check the current rate for each item |
Rates depend on the exact HSN code and notification. Check each item with your CA. See our GST 2.0 healthcare guide.
HSN codes
Most packaged medicines fall under HSN 3004. Devices and other items have their own codes. Set the code on each item, and the software prints it and builds the HSN summary for GSTR-1.
MRP and GST-inclusive billing
Medicine MRPs include GST. For a strip with MRP ₹105 at 5%, the taxable value is ₹100 and GST is ₹5 (₹2.50 CGST + ₹2.50 SGST for a local sale). The software works this out from the MRP.
Loose tablets
When you sell 4 tablets from a 10-tablet strip with MRP ₹105, the price is ₹42 and the GST inside it is worked out the same way. Stock goes down by 4 tablets.
B2B sales to clinics and hospitals
If you sell to a registered clinic or hospital, include their GSTIN on the bill so they can claim credit where allowed.
Returns
- Customer returns: issue a credit note linked to the original bill.
- Returns to distributors: make a purchase return; your input credit reduces.
Exempt items and credit
GST paid on purchases of exempt (nil-rated) drugs can’t be claimed as credit. Software should keep these sales separate, so your returns and credit stay correct.
Records to keep
- GST invoices and credit notes.
- Purchase bills with batches.
- Schedule H1 register.
- Monthly GSTR-1 and GSTR-3B data.
This post explains GST rules in simple words as we understand them on 28 Oct 2026. Rules and rates change, so please confirm with your CA or the official notifications before acting on it.