loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Hospital Sector - GST 2

ICICIdirect Research 22 Aug 2025 DISCLAIMER

Current applicable GST rates on Pharmaceuticals are (other than exempted) are 5%/12% depending on the various categories.
Medicines under NLEM portfolio (Essential Medicines) attract 5% GST whereas the rest attract 12% GST.
While the demand for medicines (being a non-discretionary category) is largely independent of the rates, complete exemption can make these medicines slightly more affordable and boost demand for the medicines from the lifestyle category.
The reduction in rates can also be positive for MNC pharma companies like Abbott, P&G Health, Sun Pharma, Cipla, Torrent that have significant OTC exposure with legacy power brands.

Impact on Hospital Sector-
At present, 5% GST is levied on hospital room rates exceeding ₹5,000. We believe further reduction on the same may lead to lower treatment costs. 
Currently, 18% GST is being levied on health Insurance. As of now, ~18% of Indian population is covered under Private (Personal and Group) insurance pool. To boost health cover, we expect a reduction in this rate to 5% or full exemption.
Top beneficiaries - Apollo Hospitals, NH, Rainbow Children, HCG among others.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere