ICAI proposes progressive GST on antibiotics to tackle antimicrobial resistance
The Infection Control Academy of India has urged Finance Minister Nirmala Sitharaman to adopt a progressive GST on antibiotics. Access drugs would remain cheap, while Watch and Reserve antibiotics face higher taxes to prevent misuse and tackle antimicrobial resistance.
Hyderabad: In a pre-budget appeal to Finance Minister Nirmala Sitharaman, the Infection Control Academy of India (ICAI) has proposed to implement a progressive GST structure on antibiotics to combat the escalating threat of antimicrobial resistance.
Ahead of the Union Budget 2026-27, in a letter to the Finance Minister, the president of ICAI, Dr Ranga Reddy Burri, said, “A significant increase in tax is a last resort or reserving antibiotics to 24 per cent or higher, will make them a more expensive resource and discourage their casual or irrational use.”
Terming the antimicrobial resistance, which he describes as a ‘perpetual pandemic’, Dr Burri said, “the proposed tax framework is carefully aligned with the WHO’s AWaRe classification system, which categorises antibiotics based on their risk of resistance.
Under this plan, standard “Access” antibiotics for common infections would remain at a low 5 per cent GST to ensure they stay affordable for the general public. However, “Watch” antibiotics would see a hike to 12 per cent, while the most critical “Reserve” drugs would face the highest tax tier.
Dr Burri argued that this move is essential because last-resort antibiotics are currently often cheaper than basic diagnostic tests, creating a distorted economic incentive that favors drug misuse over proper clinical investigation.
To ensure that the policy does not harm the poor, the Academy has called for GST exemptions on drugs procured by government hospitals and public non-profit institutions.
