New Delhi: The Association of Indian Medical Device Industry has raised concerns over persistent delays in Goods and Services Tax (GST) refunds, warning that the issue is severely impacting medical device manufacturers across India.
According to the industry body, companies are facing acute working capital challenges due to an “inverted duty structure,” where GST on raw materials and inputs stands at 18 per cent, while finished medical devices are taxed at significantly lower rates. This mismatch has resulted in large amounts of input tax credit being locked, restricting liquidity for manufacturers.
The situation is particularly difficult for small and medium-sized enterprises (SMEs), which are increasingly dependent on external financing to sustain operations. Industry stakeholders note that delayed refunds further aggravate cash flow constraints, limiting their ability to invest and expand production.
AiMeD has urged the government to expedite GST refund processes and address structural tax imbalances to support domestic manufacturing. The body emphasized that without timely intervention, the ongoing financial stress could undermine India’s ambitions of becoming a global hub for medical device production.
The concerns come at a time when the sector is already dealing with rising input costs and global supply chain disruptions, adding further pressure on manufacturers. Experts warn that unless corrective policy measures are implemented, the growth trajectory of India’s medical technology industry could face significant setbacks.
The medical device sector is a key component of India’s healthcare ecosystem and is expected to play a crucial role in achieving the country’s long-term healthcare and manufacturing goals.