GST Notification No. 02/2025: Tax Exemption for Gene Therapy, a Vital Treatment for Life-Threatening Diseases

A notification has been issued by the Central Board of Indirect Taxes and Customs (CBIC) citing that no Goods and Service Tax (GST) will be imposed on gene therapy and it shall get waived immediately.

Finance Minister Nirmala Sitharaman announced in the previous month that the gene therapy has been waived from GST. The therapy is a crucial treatment option for various life-threatening diseases. Before that, the GST on gene therapy was levied at 12%.

“An New Entry 105A has been inserted in Notification No. 02/2017-Central Tax (Rate) to fully exempt Gene Therapy from GST. This Notification shall have an immediate effect i.e. 16.01.2025,” CBIC mentioned.

The decision could change the lives of patients facing serious blood cancers, like leukaemia, lymphoma, and multiple myeloma. Now, these diseases can be treated with a new and affordable therapy called CAR-T cell therapy, which is an innovative type of treatment that uses the body’s own cells to fight cancer. This means more people will have access to effective care.

Also, the government is considering proposing duty cuts in the Union budget 2025 for imported medicines to treat cancer and rare diseases. Therefore this may offer relief to the patients loaded with the rising cost of these drugs.

An additional proposal was to regard the duty exemption for the cancer medicines. The government in 2021 introduced the National Policy for Rare Diseases (NPRD), which lists 63 ailments in this class and the way to handle them holistically and comprehensively.

The list contains primary immunodeficiency disorders, Gaucher’s Disease, Familial Duchenne Muscular Dystrophy (DMD), Narcissistic Personality Disorder (NPD), Familial Hypercholesterolemia, Spinal Muscular Atrophy (SMA), Pompe Disease, Fabry Disease, Alkaptonuria, or Black Urine Disease.

In March 2023, the central government made an important decision. They decided to completely remove customs duty on all medicines and special foods brought into the country for personal use. This applies to treatments for all rare diseases that are part of a specific list. This means that people bringing in these essential items to help with their medical needs won’t have to pay extra fees at customs.

It mentioned that at that time there was a 10% basic customs duty on drugs and medicines and some categories of lifesaving drugs and vaccines were charged a concessional rate of 5% or zero duty.