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Medtech sector seeks standard GST rate, export incentives in Budget

The scheme aims to refund to exporters the embedded central, state, and local duties and taxes paid on inputs that were so far not refunded or rebated

Medical device, Medical instrument

Sanket Koul New Delhi

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The medical devices manufacturing sector has rolled out a robust wish list for the upcoming Budget. It has sought standardisation of goods and services tax (GST) rates, enhanced export incentives, and monitoring of minimum retail price for imported devices among major demands.
 
Commenting on the demands, Himanshu Baid, managing director, Poly Medicure, said the government can consider standardising the GST rate of 12 per cent across all medical devices. This would simplify the tax structure, ensuring consistency and ease of doing business, he added.
 
The industry has also asked the Centre to enhance export incentives under the Commerce Ministry's Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to 2-2.5 per cent from the current range of 0.6-0.9 per cent.
 
 
The scheme aims to refund to the exporters the embedded central, state and local duties and taxes paid on inputs that were so far not refunded or rebated. 
 
“This will bolster the global competitiveness of Indian-made medical devices, enabling manufacturers to expand their reach in international markets,” Baid said.
 
Another major demand is the monitoring of maximum retail prices of imported medical devices into India so that domestic consumers can get affordable rates.
 
The Indian medtech market, valued at $12 billion, imported devices worth $8.2 billion in FY24. Around 80 to 85 per cent of medical devices in India were sourced internationally, according to a recent report by EY-Parthenon. 
 
In its pre-Budget memorandum to the Union Finance Ministry, the Association of Indian Medical Device Industry (AIMED) stated that the government’s efforts to reduce import duty on devices go in vain since consumers and patients pay “10 to 30 times the landed price of imported devices.”
 
The association has also called for a recall of Nil and concessional duty notifications for medical devices that are being made in India and where adequate capacity exists.
 
“Currently, there is no gain to the consumers from the Nil duty as affordability is linked to the price labelled on the product as that is what has been charged to them,” AIMED said.  
 
While AIMED has asked for a 5-15 per cent Customs duty on imported devices, the Medical Technology Association of India (MTaI) has sought lower Customs duty rates for products where domestic alternatives are not available. 
 
“The high Customs duty regime significantly increases the cost of medical devices. This undermines the government’s efforts to make affordable healthcare accessible to the masses through initiatives like Ayushman Bharat,” Pavan Choudary, chairman, MTaI said. 
 
Among other demands, industry players have also asked for extension and strengthening of the production-linked incentive (PLI) scheme for medical devices by another two-three years. 
 
“This would support local manufacturers in scaling production, reducing import dependence, and achieving long-term growth and sustainability,” Baid added. 

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First Published: Jan 14 2025 | 7:57 PM IST

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