The Association of Diagnostic Manufacturers of India (ADMI) has urged the government to introduce a single 5% GST rate on in-vitro diagnostic (IVD) equipment, diagnostic kits, and reagents. In a formal appeal to Union Finance Minister Nirmala Sitharaman, ADMI highlighted that the current tax structure imposes 18% GST on diagnostic equipment and 12% on reagents, with only a few items taxed at 5%. According to the association, this uneven taxation raises testing costs, discourages early disease detection, and ultimately hampers public health efforts.
ADMI argued that affordable and accessible diagnostics are essential for both routine healthcare and the management of chronic illnesses. High GST rates make tests more expensive, discouraging timely diagnosis despite evidence that early detection helps lower overall healthcare costs, especially for non-communicable diseases. The association emphasized that healthcare is a necessity, not a luxury, and affordable diagnostics are key to supporting government schemes like Ayushman Bharat.
From an industry standpoint, while IVD products account for a relatively small portion of India’s medical device market, they are critical to clinical workflows. Currently, about 65% of diagnostic equipment and reagents are imported, and reducing GST would help strengthen domestic manufacturing capacity and lessen dependence on foreign suppliers. ADMI also pointed out that higher taxes contradict government initiatives to encourage local production and make healthcare more affordable for patients.
To bring parity, ADMI noted that medical appliances and implants are already taxed at 5%, making a similar GST rate for IVD products logical. Imaging diagnostics has already been recommended for a 5% GST, and extending this to pathology diagnostics would simplify compliance, reduce costs for smaller labs and healthcare providers, and bring consistency across the sector.
In its proposal, ADMI has recommended:
• A uniform 5% GST on all diagnostic products
• A Health Cess on imports to create a level playing field for domestic manufacturers
• A time-bound GST refund mechanism to ease liquidity pressures on companies without impacting government revenue
The association has also included detailed HSN codes along with current and suggested GST rates to ensure smooth and transparent policy implementation.