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Gene therapy exempted from GST; duty cuts on critical medicines for cancer and rare diseases expected

Financial Express

The Central Board of Indirect Taxes and Customs (CBIC) has issued a notification stating that no Goods and Service Tax (GST) will be levied on gene therapy and it would be exempted with immediate effect.

Last month, Finance Minister Nirmala Sitharaman had announced that gene therapy has been full exempted from GST. The therapy is a critical treatment option for various life-threatening disease. Earlier, GST on gene therapy was set at 12 percent.

“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 stated.

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Interestingly, this move can have significant impact on the lives of patients as life-threatening blood cancers, such as leukaemias, lymphomas, and multiple myeloma, can now be addressed with affordable and accessible CAR-T cell therapy—a groundbreaking form of cell-based gene therapy.

According to a recent report by Mint, the government is also considering to propose duty cuts in the Union budget 2025 for medicines imported to treat cancer and rare diseases. Consequently, this may offer relief for patients burdened with the increasing cost of such drugs.

Citing an official, Mint reported that another proposal was to consider duty exemption for cancer medicines. In 2021, the government introduced the National Policy for Rare Diseases (NPRD), which lists 63 ailments in this category and how to tackle them in a holistic and comprehensive manner.

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

In March 2023, the Central government fully exempted all drugs and foods for special medical purposes imported for personal use for treatment of all rare diseases listed under the NPRD from basic customs duty. At that time, it said drugs and medicines generally attracted basic customs duty of 10%, while some categories of lifesaving drugs and vaccines were levied a concessional rate of 5% or zero duty.