KTR Rao writes to Piyush Goyal to cut GST on Medical Devices

IT and Industries Minister KT Rama Rao has written to Union Minister for Commerce and Industry, Piyush Goyal on Tuesday to cut down the GST Rates on medical devices to 12 percent and on diagnostics to 5 per cent as against the existing rate is 18 percent and introduce plans to promote component manufacturing in India.

He also emphasised the importance of incentivizing businesses by gradually boosting import charges as part of a Phased Manufacturing Plan (PMP), as was done for mobile phones and X-Ray machines.

During the recent 20th anniversary edition of BioAsia, a roundtable meeting on medical devices was organised, where CEOs and association officials came and expressed their worries about the business.

Rama Rao expressed concerns about GST implications, import substitution, greater self-reliance, inverted duty structures affecting Make in India, insufficient testing and certification infrastructure, raw material availability, and supply chain problems.

He advocated for a reassessment and decrease of the 12% and 5% GST paid on medical devices and diagnostics, respectively, from the existing 18%. He added that medical gadgets are not luxuries, and that it is crucial to acknowledge that devices and diagnostics will be critical in making healthcare available to everybody.

“The Telangana government is willing to partner with the union government to establish a Medical Imaging Hub with advanced equipment and machinery in the Medical Devices Park, Hyderabad to promote industry to manufacture these components,” Rama Rao said, adding that there was a need to ramp up testing facilities within the country as the number of labs for testing medical devices was insufficient for an industry that was growing at a CAGR of more than 15%.

The existing facilities were ill-equipped and did not always have the necessary accreditation by the National Accreditation Board for Testing and Calibration Laboratories (NABL) or were not always notified and empaneled by the Central Drugs Standard Control Organization (CDSCO), and manufacturers had no access to the availability of blood and tissue samples. Waiting times and fees at existing institutions were also lengthy and excessive.

Rama Rao urged the union government to consider drafting legislation for quality testing labs in India, incentivize accredited labs, and encourage the establishment of more testing facilities with advanced equipment to ensure public procurement is encouraged on the basis of CDSCO registration or Manufacturing License and Indian Certification of Medical Devices accredited by the National Accreditation Board for Certification Bodies (NABCB).

The Minister also addressed the ongoing issues with raw material availability in the medical device industry and proposed encouraging local indigenisation of medical device component manufacture.