₹ 2 lakh – ₹ 80 lakh
Check your pre-approved business loan
Enter mobile and OTP | Check offer | Know your exact loan terms
-
The HSN code for most medicines is 3004, which covers medicaments supplied in measured doses or in retail packs, such as tablets, capsules, syrups and injections. Heading 3003 covers mixtures that are not supplied in this way. From 22 September 2025, GST is 5% on most drugs and medicines and Nil on the life-saving drugs that the GST Council listed.
Figure Value HSN heading for retail medicines 3004 (3003 for mixtures not put up in measured doses or retail packs) GST rate on most drugs and medicines from 22 September 2025 5%, down from 12% Life-saving drugs at Nil GST 33 drugs that moved from 12% and 3 drugs that moved from 5% HSN digits on a tax invoice 4 digits up to Rs. 5 crore of turnover, 6 digits above Rs. 5 crore The figures come from the GST Council release on its 56th meeting, Notification 9/2025-Central Tax (Rate), Notification 78/2020-Central Tax and the GST portal. GST classification is product-specific, so check the code and the rate of your product on the GST portal before you issue an invoice.
In India, medicines and pharmaceutical products are generally classified under Chapter 30 of the HSN framework. The applicable HSN code determines the GST rate charged on a product, making accurate classification essential for correct GST invoicing, return filing and regulatory compliance.
Following the GST 2.0 rationalisation that came into effect on 22 September 2025, the GST structure for medicines underwent significant changes. The 12% GST slab for pharmaceutical products was removed, with most medicines now attracting GST at 5%. In addition, a specified list of life-saving medicines has been fully exempted from GST.
This guide explains the current HSN classifications and GST rates applicable to medicines under Chapter 30, outlines the exempt category, and describes how pharmaceutical products are classified under the GST framework.
Key GST 2.0 update
-
As part of the recommendations of the 56th GST Council, GST rates applicable to pharmaceutical products were rationalised. The 12% GST category for medicines was discontinued, resulting in most finished pharmaceutical formulations being taxed at 5% instead of 12%. Additionally, 33 life-saving medicines moved from 12% to Nil and 3 life-saving medicines used in the treatment of cancer, rare diseases and other severe chronic diseases moved from 5% to Nil. Most medical devices and diagnostic kits were also brought under the 5% GST slab.
However, Active Pharmaceutical Ingredients (APIs), bulk drugs and pharmaceutical intermediates continue to attract GST at 18%. As GST classification is product-specific, businesses should always verify the applicable HSN code and GST rate for a particular medicine or pharmaceutical product through the official GST portal or relevant government notifications before issuing invoices or filing returns.
Medicine GST rate change at a glance
The GST Council announced the new rates for medicines after its 56th meeting, and they took effect on 22 September 2025. The table gives the change for drugs and medicines.
Point Detail Effective date 22 September 2025 33 life-saving drugs and medicines listed by the GST Council 12% to Nil 3 life-saving drugs and medicines used for cancer, rare diseases and other severe chronic diseases 5% to Nil All other drugs and medicines 12% to 5% Rate notification Notification 9/2025-Central Tax (Rate), Schedule I, which lists medicaments of headings 3003 and 3004 at 2.5% central tax, or 5% GST in total Where to check a drug The notified list and the HSN search on the GST portal What is a medicine HSN code?
An HSN code is a numerical classification code used to identify products for GST and customs purposes. In India, medicines and pharmaceutical products are generally classified under Chapter 30 of the HSN system, which covers pharmaceutical preparations, vaccines, sera, blood products, medicated dressings and related healthcare products.
HSN codes may consist of 4, 6 or 8 digits, with additional digits providing a more detailed and specific classification of the product. For instance, HSN code 3004 broadly covers medicaments supplied in measured doses or packaged for retail sale, while the extended codes within this category identify specific types of medicines and therapeutic products.
Using the correct HSN code is essential for determining the applicable GST rate, issuing accurate tax invoices, ensuring proper GST compliance and facilitating smooth customs clearance for businesses involved in importing or exporting pharmaceutical products.
HSN code and GST rate on medicine and pharmaceuticals
-
The table below outlines the principal HSN classifications under Chapter 30 and the GST rates applicable following the GST 2.0 rationalisation. Pharmaceutical products now generally fall under the Nil, 5% or 18% GST categories, as the 12% GST rate is no longer applicable to medicines and pharmaceutical products.
HSN code Product description GST rate 3001 Glands and other organs for therapeutic purposes; heparin; and human or animal substances prepared for therapeutic or prophylactic use 5% 3002 Human blood, animal blood, antisera, vaccines, toxins, cultures of micro-organisms and similar products 5% (certain specified vaccines and products may be exempt) 3003 Medicaments consisting of two or more constituents mixed together for therapeutic or prophylactic use, not supplied in measured doses or retail packs 5% 3004 Medicaments, whether mixed or unmixed, supplied in measured doses or packed for retail sale, including most tablets, capsules, syrups and injections 5% 3005 Wadding, gauze, bandages and similar articles impregnated or coated with pharmaceutical substances, or packaged for retail medical use 5% 3006 Pharmaceutical goods specified in Note 4 to Chapter 30, including sterile surgical products, dental cements, first-aid kits and contraceptive products 5% (certain contraceptive products may be exempt) 3002/3003/3004 Specified life-saving medicines used for the treatment of cancer, rare diseases and other serious medical conditions, as notified by the government Nil 3822 Diagnostic and laboratory reagents, certified reference materials and diagnostic kits 5% 2936/2941 and related headings Active Pharmaceutical Ingredients (APIs), bulk drugs and pharmaceutical intermediates used in manufacturing 18% As GST classification is product-specific, businesses should verify the applicable HSN code and GST rate for each product before issuing invoices or filing GST returns. Accurate classification is essential for compliance and correct tax treatment under GST.
Choosing the HSN heading for your medicine
| If your product is | Then the HSN heading is | GST rate |
| Tablets, capsules, syrups or injections supplied in measured doses or in retail packs | 3004 | 5% |
| A mixture of two or more constituents that is not put up in measured doses or retail packs | 3003 | 5% |
| An Ayurvedic, Unani, Siddha, homoeopathic or bio-chemic medicament | 3004 or 3003, by the same test of how it is put up | 5% |
| A vaccine, antiserum or human blood product | 3002 | 5%. Check the notified list for the exact product |
| Wadding, gauze or a bandage that is impregnated with pharmaceutical substances or put up for retail sale | 3005 | 5% |
| A diagnostic or laboratory reagent | 3822 | 5% |
| A surgical instrument or appliance | 9018 | 5% |
| Medical grade oxygen | 2804 | 5% |
A product can fall in another heading because of what it contains or how it is put up. Check the full code on the GST portal before you issue an invoice.
Importance of HSN codes for medicine
- Correct GST treatment — The HSN code determines the applicable GST rate, whether Nil, 5% or 18%. Using an incorrect HSN code can result in the wrong tax being charged and may create compliance issues.
- Accurate invoicing and GST return filing — GST invoices and returns must contain the appropriate HSN code, with the required level of detail depending on the taxpayer's turnover and applicable GST regulations.
- Efficient customs clearance — For imported and exported goods, the correct HSN classification helps ensure smoother customs processing and the application of the appropriate customs duties and taxes.
- Reduced risk of penalties and disputes — Incorrect classification may lead to underpayment or overpayment of tax, potentially resulting in interest, penalties and scrutiny from tax authorities.
- Improved inventory management and reporting — Consistent use of HSN codes supports accurate stock management, product categorisation and reliable tax and business reporting.
GST rate categories for medicines after GST 2.0
The HSN system divides medicines into different categories based on their type and usage. Here are some key categories:
- Nil (Exempt) — With effect from 22 September 2025, a specified list of 37 life-saving medicines, including treatments for cancer, rare diseases and other serious medical conditions, is fully exempt from GST. Many of these products were previously subject to GST at 5% or 12%. Certain contraceptive products and other notified healthcare items also continue to enjoy GST exemption.
- 5% (Standard rate for most medicines) — The majority of finished pharmaceutical products now attract GST at 5%. This includes allopathic, Ayurvedic, Unani, Siddha and Homeopathic medicines supplied in forms such as tablets, capsules, syrups and injections. Most diagnostic kits and several medical devices are also taxed at 5%. The reduction of many medicines from the earlier 12% rate to 5% represents one of the most significant changes introduced under the GST 2.0 rationalisation.
- 18% (Industrial inputs and specified products) — Active Pharmaceutical Ingredients (APIs), bulk drugs, pharmaceutical intermediates and certain laboratory reagents and consumables continue to attract GST at 18%. These products are generally regarded as industrial or manufacturing inputs rather than finished consumer medicines. Certain specialised products, including nicotine gum, also remain subject to the higher GST rate.
Check your pre-approved business loan offer
Medicine GST myths and facts
| Myth | Fact |
| All medicines are taxed at 12% GST. | That was the rate for most medicines until 21 September 2025. From 22 September 2025, most drugs and medicines are at 5%. |
| Every life-saving drug is Nil. | The GST Council listed 33 drugs that moved from 12% to Nil and 3 drugs that moved from 5% to Nil. A life-saving drug that is not on the list is taxed like other drugs, at 5%. |
| Ayurvedic and homoeopathic medicines are exempt. | Schedule I lists them under headings 3003 and 3004 along with other medicaments, at 5% GST in total. |
| A medical store does not need an HSN code on its bills. | A registered person with turnover up to Rs. 5 crore may leave out the digits only on an invoice for a supply to an unregistered person. A supply to a registered business needs the code. |
| Any four-digit code will do for every business. | The digits depend on the turnover of the preceding financial year: 4 digits up to Rs. 5 crore and 6 digits above. The rate follows the heading, so a wrong heading can bring a wrong rate. |
| Every medical product sits in Chapter 30. | Chapter 30 covers pharmaceutical products. Surgical instruments are in heading 9018 and medical grade oxygen is in heading 2804. |
Examples of medicine HSN codes
To illustrate how these codes apply to real-world products, here are some common examples:
| Product type | HSN code | GST rate |
| Generic medicines | 3003 | 5% |
| Branded pharmaceutical preparations | 3004 | 12% |
| Vaccines | 3002 | 5% |
| Herbal and ayurvedic formulations | 3003 | 5% |
| Diagnostic test kits | 3822 | 18% |
Understanding these examples helps businesses accurately classify their products, ensuring compliance and avoiding potential fines. For example, vaccines used in immunisation are subject to a lower GST rate of 5%, whereas certain diagnostic reagents may fall under an 18% GST rate. Proper use of these codes facilitates smoother customs processes and helps businesses maintain compliance with Indian tax regulations.
HSN code digit requirements by turnover
| Annual aggregate turnover | HSN digits required on invoices |
|---|---|
| Up to Rs. 5 crore (B2B supplies) | 4 digits |
| Up to Rs. 5 crore (B2C supplies) | 4 digits (optional in some cases) |
| More than Rs. 5 crore | 6 digits |
| Imports and exports | 8 digits |
HSN code digit requirements by turnover
| Annual aggregate turnover | HSN digits required on invoices |
| Up to Rs. 5 crore (B2B supplies) | 4 digits |
| Up to Rs. 5 crore (B2C supplies) | Optional: a registered person may leave out the digits on an invoice for a supply to an unregistered person |
| More than Rs. 5 crore | 6 digits |
| Imports and exports | 8 digits |
How to find the HSN code and GST rate for a medicine
-
- Determine the nature of the product, such as a finished medicine, vaccine, medicated dressing, diagnostic kit, Active Pharmaceutical Ingredient (API) or another pharmaceutical item.
- Identify the appropriate classification under Chapter 30 of the HSN system, or under the relevant HSN chapter applicable to medical devices, APIs or related products.
- Use the HSN and GST rate search facility available on the GST portal to verify the correct HSN code and the applicable GST rate.
- Review the relevant CBIC notifications to confirm whether the product is included in the list of specified life-saving medicines that qualify for GST exemption.
- If there is any uncertainty regarding classification, seek professional advice from a GST practitioner or consider applying for an advance ruling to obtain clarity and minimise compliance risks.
Mistakes to avoid on medicine invoices
Check the points below before you issue an invoice.
- Using 12% for a medicine. The 12% rate for most medicines ended on 21 September 2025, and rate lists dated before 22 September 2025 still show it.
- Using heading 3003 for a tablet or syrup that is sold in retail packs. Heading 3004 covers medicaments supplied in measured doses or in retail packs, and 3003 covers mixtures that are not supplied in this way.
- Treating 30021290 as the code for every vaccine. It is the Other item under antisera and other blood fractions, and vaccines for human medicine have their own subheading.
- Showing 4 digits when the turnover of the preceding financial year is above Rs. 5 crore. That turnover needs 6 digits.
- Taking a drug as Nil without checking the list. The GST Council listed 33 drugs and 3 drugs, and other drugs and medicines are at 5%.
- Using a Chapter 30 code for a surgical instrument. Instruments and appliances for medical, surgical, dental or veterinary use are in heading 9018.
Conclusion
Knowing and applying the correct HSN code for medicines and pharmaceutical products is crucial for businesses in the industry. Accurate classification helps ensure compliance with GST regulations, simplifies tax calculations, and facilitates seamless trade and logistics. This not only supports legal and financial operations but also builds a trustworthy business reputation. For companies aiming to grow or enhance their operations, accessing financial resources such as a business loan can provide the necessary capital to expand and maintain financial stability.
Get business loan for your needs
Women Business Loan
Get Women Business Loan upto 80 Lakh
Medical Store Business Loan
Get Medical Store Business Loan upto 80 Lakh
Manufacturer Business Loan
Get Manufacturer Business Loan upto 80 Lakh
Our loan variants
Loans for business needs
Select loan by amount
Business loan in different cities
Business loan in bangalore
Business loan in mumbai
Business loan in pune
Business loan in Jaipur
Business loan in Kerala
Business Loan in Telangana
Business Loan in Surat
Business Loan in Ranchi
Business Loan in Odisha
Business Loan in Noida
Business Loan in Kolkata
Business Loan in Karnataka
Business Loan in Hyderabad
Business Loan in Gujarat
Business Loan in Coimbatore
Business Loan in Assam
Business Loan in Ahmedabad
Business loan for different budgets
2 lakh business loan
3 lakh business loan
5 lakh business loan
10 lakh business loan
15 lakh business loan
20 lakh business loan
25 lakh business loan
30 lakh business loan
50 lakh business loan
Types of business loan
Unsecured Business Loan
Secured Business Loan
Term Loan
Cash Credit
Working Capital Loan
Machinery Loan
Line of Credit
Micro Loan
Merchant cash Loan
Frequently Asked Questions
Overview
What is HSN code 3004 medicine?
The HSN code 3004 refers to medicines that are used for therapeutic or prophylactic purposes. This category includes various medicinal products, such as vaccines, antibiotics, and other essential drugs. The code helps in the accurate classification of pharmaceutical products for tax purposes and ensures compliance with GST regulations, facilitating smooth trade and import/export processes.
What is the HSN code 30021290?
The HSN code 30021290 specifically pertains to vaccines and similar products. This code is used to categorise certain immunological products not specified in other codes, ensuring that these medicines are accurately documented for regulatory and taxation purposes. It plays an essential role in streamlining the process of import, export, and sale of such products, aligning with GST compliance standards.
How does correct HSN code help avoid GST penalties in pharma?
Using the correct HSN code ensures that medicines and pharmaceutical products are classified accurately for GST purposes. This helps businesses apply the correct tax rate, file returns properly, and maintain compliant invoices. Incorrect HSN reporting can lead to notices, tax demands, interest, penalties, and delays during GST audits.
What changed in medicine GST rates under 2026 GST reforms?
Under the GST reforms effective from September 2025 and continuing into 2026, many medicines were moved to a lower GST slab, while several life-saving drugs received full GST exemption. The reforms aimed to simplify tax rates, reduce compliance complexity, and make essential healthcare products more affordable for Indian consumers.
What HSN code applies to allopathic medicines under GST?
Most allopathic medicines are classified under HSN heading 3004, which covers medicaments supplied in measured doses or in retail packs, such as tablets, capsules, syrups and injections. Heading 3003 covers mixtures of two or more constituents that are not supplied in this way. From 22 September 2025, Schedule I of Notification 9/2025-Central Tax (Rate) lists both headings at 2.5% central tax, which is 5% GST in total. Check the full code on the GST portal.
Is GST applicable on life-saving drugs?
It depends on the drug. From 22 September 2025, the GST Council cut GST on 33 life-saving drugs and medicines from 12% to Nil, and on 3 drugs used for cancer, rare diseases and other severe chronic diseases from 5% to Nil. All other drugs and medicines moved from 12% to 5%. A life-saving drug that is not on the notified list is taxed at the rate for other drugs, so check the list for the exact drug name before you invoice.
Does GST apply differently to herbal and allopathic medicines?
No. Schedule I of Notification 9/2025-Central Tax (Rate) lists medicaments of the Ayurvedic, Unani, Siddha, homoeopathic and bio-chemic systems under the same headings, 3003 and 3004, as other medicaments, at 5% GST in total. The test is the form of the product: a medicament supplied in measured doses or in retail packs falls in 3004, and a mixture not supplied in this way falls in 3003. A herbal product that is not a medicament may be classified elsewhere, so check its description.
What HSN code applies to surgical instruments?
Instruments and appliances used in medical, surgical, dental or veterinary sciences are classified under HSN heading 9018, not under Chapter 30. From 22 September 2025, GST on goods in heading 9018 moved from 12% to 5%. Sterile surgical goods such as sterile sutures are a separate case, because specified sterile surgical items fall in heading 3006 of Chapter 30. For a given instrument, check the full code on the GST portal.
Do I need to mention HSN code on every medicine invoice?
Mostly yes. Under Notification 78/2020-Central Tax, which applies from 1 April 2021, a taxpayer with aggregate turnover up to Rs. 5 crore in the preceding financial year mentions 4 digits of the HSN code on a tax invoice, and a taxpayer above Rs. 5 crore mentions 6 digits. A registered person with turnover up to Rs. 5 crore may leave out the digits on an invoice for a supply to an unregistered person.
What is the GST rate on bandages, gauze and dressings?
Wadding, gauze, bandages and similar articles that are impregnated or coated with pharmaceutical substances, or sold in retail packs for medical, surgical, dental or veterinary use, are classified under HSN heading 3005. From 22 September 2025, the GST Council reduced GST on such supplies from 12% to 5%. Rate lists dated before that day show the old 12% rate, so check the date of any list that you use.
What GST rate applies to diagnostic kits and reagents?
From 22 September 2025, GST on all diagnostic kits and reagents moved from 12% to 5%, as the GST Council announced after its 56th meeting. Diagnostic and laboratory reagents are classified under heading 3822, and a kit can fall in another heading depending on what it contains, so check the description of your product on the GST portal. Rate lists dated before that day show the old rate.
What is the GST rate on medical grade oxygen?
From 22 September 2025, GST on medical grade oxygen is 5%, down from 12%, as set out in the revised GST rate structure that the Central Drugs Standard Control Organisation circulated to State and UT licensing authorities in October 2025. Oxygen is classified under HSN heading 2804, outside Chapter 30. Check the full eight-digit code for the grade that you supply on the GST portal.
Is GST 5% on thermometers and glucometers?
Yes, from 22 September 2025. The GST Council reduced GST on thermometers for medical, surgical, dental or veterinary use from 18% to 5%, and on blood glucose monitoring systems (glucometers) and test strips from 12% to 5%. Both are medical devices and sit outside Chapter 30. Check the HSN code of your exact model on the GST portal before you issue an invoice.
Does selling nil-rated medicines affect input tax credit?
Yes. Section 2(47) of the CGST Act defines an exempt supply as a supply that attracts a nil rate of tax. Section 17(2) restricts credit, where goods or services are used partly for taxable supplies and partly for exempt supplies, to the input tax attributable to the taxable supplies. A seller of both Nil and 5% medicines can therefore claim credit only for the taxable part. Ask a GST practitioner how to apportion it.
Does an e-invoice for medicines need a 6-digit HSN code?
Yes, for a taxpayer with aggregate turnover above Rs. 5 crore. The e-invoice portal states that such taxpayers must mention 6-digit HSN codes for their outward supplies under Notification 78/2020-Central Tax, and that the e-invoice system will stop accepting 4-digit codes from a date that the portal will intimate. Check the portal for that date.
Is HSN reporting for retail sales mandatory in GSTR-1?
Not for the B2C supplies tab. The GST portal says that a taxpayer can leave the B2C tab of Table 12 empty, and that a mismatch in it brings only a warning. The B2B tab is different: if other B2B tables hold data, an empty HSN tab stops the summary. The digits required are 4 for aggregate turnover up to Rs. 5 crore and 6 above that.
More articles
Disclaimer
Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.