As India moved closer towards a country-wide Goods and Services Tax (GST) on Thursday with the GST Council fixing tax rates of 1,211 items, the Andhra Pradesh Medtech Zone (AMTZ) has hailed the new policy that is considered as the biggest tax reform since Independence aimed at improving ease of doing business in the country.
The GST Council broadly agreed on four tax brackets for services, which are 5 per cent, 12 per cent, the standard 18 per cent and the luxury rate of 28 per cent. It will subsume excise and service tax, and various other local levies including VAT and octroy.
“The rate of GST applicable on medical sector has been extremely encouraging,” said Dr Jitendar Sharma, CEO of AMTZ, which is Indias first ultra modern medical equipment manufacturing zone located in Visakhapatnam.
AMTZ being a harbinger of medical devices production in India, has been the flagship programme for medical devices sector and is set to boast of over 200 companies in a span of two years.
Given the current rate on medical devices, which is VAT plus service tax plus octroy (in some locations), the GST on most medical devices shall fall at 12 per cent bar which would be about 4-6 per cent lesser than current market rates of taxation.
While, industry would be encouraged by this to achieve lower costs of manufacturing, the advantages of cost reduction are likely to get passed on to consumers. AMTZ believes that GST will bring a new era for medical devices domestic manufacturing.
Highlights of GST rates of IVD/medical devices are as below:
|Nil||Human Blood Products, Condoms and Contraceptives, Hearing Aids etc.,|
|5%||Nuclear Grade Chemicals, Human/Animal Blood vaccines, Human/Animal Blood vaccines, diagnostic test kits, Cardiac stents, artificial kidney, dialyzers, rehabilitation aids, Bio gas Plant, etc.|
|12%||Anesthetics; animal blood prepared for therapeutic, prophylactic or diagnostic uses; Medicaments; ayurvedic; homeopathic; gauges, bandages, dressing, plasters used for medical, dental and veterinary purpose; sterile surgical sutures, absorbable surgical sutures, sterile tissue adhesives; photographic plates and film for X ray for medical use; surgical rubber gloves/ medical examination rubber gloves, nipples of feeding bottles; contact lenses; glucose meters; instruments, surgical, electromedical apparatus, respiration apparatus, breathing accessories, orthopedic appliances; X- ray apparatus of medical surgical dental use, X- ray generators, X- ray tubes and radiotherapy machines; LED Lights; drugs and medicines intended for personal use and etc,.|
|18%||Radioactive chemical elements and radioactive isotopes (including the fissile or fertile chemical elements and isotopes) and their compounds, mixtures and residues containing these products; Diagnostic laboratory reagents; Glasses for corrective spectacles; screws, bolts, nuts, rivets and brain plates; nuclear reactors and isotope separators; steam/vapor boilers, steam and hydraulic turbines; industrial electric furnaces and ovens; laboratory equipment for heat treatment of materials; optical fibers; calibration apparatus for checking and measuring flow, level, pressure and gases; medical furnitures, ORtables and other chairs and etc.|
|28%||glass envelopes including tubes and bulbs, CRT Tube; autoclaves, tissue culture chambers; batteries, vacuum cleaners, shavers, hair clippers, electromechanical domestic appliances; optical microscopes; weight balances of 5 cg and etc.|