Central idea: The Centre has exempted all drugs and food for special medical purposes, imported for personal use, for the treatment of rare diseases listed under the National Policy for Rare Diseases 2021 from basic customs duty.

What are Rare Diseases?

• Rare diseases are those medical conditions that affect a small percentage of the population.
• In India, a disease is considered rare if it affects less than 1 in 2,000 people.
• These diseases are often genetic and are chronic, degenerative, and life-threatening.
• There are over 7,000 known rare diseases, and it is estimated that about 70 million people in India are affected by them.
• Many of these diseases do not have a cure, and the treatment can be expensive and difficult to access.

Need for duty exemption

• This decision has been taken to help reduce the burden of the cost of treatment for patients and families.
• The drugs and food required for the treatment of these rare diseases are often expensive and need to be imported.
• This exemption will result in substantial cost savings and provide much-needed relief to patients with rare diseases.

Key medicines under this exemption

• The central government has fully exempted Pembrolizumab (Keytruda), a drug used in the treatment of various types of cancer, from basic customs duty.
• Previously, the GST rate for Keytruda was cut to 5 per cent from 12 per cent in a meeting held in September 2021 by the GST Council.
• Life-saving drugs Zolgensma and Viltepso used in the treatment of spinal muscular atrophy were exempted from GST when imported for personal use.

How the new duty exemption works?

• The exemption has been granted by the Central Board of Indirect Taxes and Customs (CBIC) by substituting “Drugs, Medicines or Food for Special Medical Purposes (FSMP)” instead of “drugs or medicines”.
• To avail of this exemption, the individual importer has to produce a certificate from the central or state director health services or district medical officer/civil surgeon of the district.

How are life-saving medicines taxed?

• Drugs/medicines generally attract basic customs duty of 10 per cent, while some categories of lifesaving drugs/vaccines attract a concessional rate of 5 per cent or nil.
• In its meeting in September 2021, the GST Council had reduced tax rates for several life-saving drugs.

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