HSN Code 3004: GST Rate, Medicine Classification & Examples
Understanding HSN Code 3004 is important for pharmaceutical manufacturers, wholesalers, distributors, pharmacies, and other healthcare businesses for accurate GST classification and invoicing.
HSN 3004 covers medicaments for therapeutic or prophylactic use that are put up in measured doses or in forms or packings for retail sale. This includes several types of finished pharmaceutical formulations, including allopathic and specified traditional-system medicines.
The GST treatment of medicines changed significantly in September 2025. The general GST rate on drugs and medicines was reduced from 12% to 5%, while specified life-saving medicines were moved to Nil rate. The revised rates took effect from 22 September 2025. Press Information Bureau+1
In this guide, we explain HSN 3004, its classification, the latest GST rate, exemptions, ITC implications, and how businesses should use the correct HSN when preparing GST invoices.
What Is HSN Code 3004?
HSN Code 3004 covers:
Medicaments, other than goods of headings 3002, 3005 or 3006, consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale.
In simple terms, HSN 3004 generally covers finished medicaments prepared for therapeutic or preventive use and supplied in measured doses or retail packaging.
Examples can include:
- Tablets
- Capsules
- Syrups
- Certain injections
- Ointments and creams with medicinal formulations
- Other pharmaceutical formulations supplied in measured doses or retail packs
- Certain Ayurvedic, Unani, Siddha, Homoeopathic and Bio-chemic medicaments covered by the heading
However, not every pharmaceutical or healthcare product automatically falls under HSN 3004. The correct classification depends on the product's composition, formulation, intended use, presentation and the applicable tariff description.
What Is the GST Rate on HSN Code 3004?
The GST rate applicable to medicines was revised under the 2025 GST rate rationalisation.
The government announced that all other drugs and medicines were reduced from 12% to 5%, while specified life-saving medicines were reduced to Nil rate. Press Information Bureau+1
Latest GST treatment of medicines
The GST Council's official FAQ states that all drugs/medicines are prescribed a concessional GST rate of 5%, except those specifically covered at Nil rate. Goods & Services Tax Council
Therefore, the older practice of describing general HSN 3004 medicines as 12% GST is outdated.
Important
The GST rate should not be determined solely from the first four digits of the HSN code. Businesses should verify the complete tariff classification and applicable GST notification, particularly for products that may fall under another heading or a specific exemption.
GST Rate Changes for Medicines in 2025
The 56th GST Council rate rationalisation introduced significant relief for medicines and healthcare products.
For medicines:
- All other drugs and medicines: 12% → 5%
- Specified life-saving medicines: 12% → Nil
- Certain additional specified life-saving medicines were also reduced from 5% to Nil. Press Information Bureau+1
The revised rates for goods were implemented from 22 September 2025. Goods & Services Tax Council
The government specifically stated that the 5% concessional rate applies to medicines except those specifically prescribed at Nil rate. Press Information Bureau
Which Products Are Covered Under HSN 3004?
HSN 3004 generally covers medicaments that meet the heading's classification requirements and are supplied in measured doses or retail packaging.
Common examples include:
- Prescription medicines
- Generic medicines
- Branded pharmaceutical formulations
- Tablets and capsules
- Medicinal syrups
- Certain medicinal creams and ointments
- Certain pharmaceutical formulations for therapeutic use
- Certain Ayurvedic, Unani, Siddha, Homoeopathic and Bio-chemic medicaments
The classification should be determined based on the actual characteristics and tariff description of the product, rather than simply whether it is sold through a pharmacy.
HSN 3004 vs HSN 3002, 3005 and 3006
One of the most common GST classification mistakes is using HSN 3004 for every pharmaceutical or healthcare product.
The official tariff description for 3004 specifically excludes goods covered by headings 3002, 3005 and 3006. Press Information Bureau
Therefore, a business should verify the appropriate heading before assigning HSN 3004 to a product.
Are Ayurvedic and Homoeopathic Medicines Covered Under HSN 3004?
Certain Ayurvedic, Unani, Siddha, Homoeopathic and Bio-chemic medicaments are expressly included in the description of HSN 3004 when they meet the relevant classification conditions.
The important point is that the GST rate should not be assumed to be 12%.
Following the 2025 GST rate rationalisation, the government stated that other medicines, including Ayurveda, Unani and Homoeopathy medicines, were reduced from 12% to 5%. Press Information Bureau+1
The exact classification and rate should still be verified against the product's applicable tariff entry and current GST notification.
Are Vitamins and Supplements Covered Under HSN 3004?
Not necessarily.
The earlier practice of stating that all vitamins and supplements under HSN 3004 attract 18% GST is too broad and should not be used as a general rule.
The classification of a vitamin, nutraceutical, dietary supplement or similar product depends on factors such as:
- Composition
- Ingredients
- Formulation
- Intended use
- Product presentation
- Applicable tariff classification
Therefore, businesses should determine the appropriate HSN before applying the GST rate.
Do not classify a product as HSN 3004 merely because it is marketed as a health or dietary supplement.
How to Find the Correct HSN Code for a Medicine
Businesses can follow these steps to determine the appropriate HSN:
- Identify the product's composition and formulation.
- Check whether it is intended for therapeutic or prophylactic use.
- Determine whether it is supplied in measured doses or retail packaging.
- Check whether it falls under another Chapter 30 heading, such as 3002, 3005 or 3006.
- Verify the applicable tariff classification and description.
- Check the latest GST rate notification or official rate schedule.
- Use an HSN/SAC lookup tool as an additional verification step.
Explore the GimBooks HSN/SAC Code & GST Rate Finder to look up HSN classifications and applicable GST rates.
Download the free HSN Code 3004 and Medicine GST Checklist PDF by GimBooks to verify medicine classification, check applicable GST rates, identify Nil-rated medicines, and maintain accurate GST invoices.
GST on Medicine Billing: Example
Suppose a pharmacy sells a medicine that is correctly classified under HSN 3004 and is subject to the general 5% GST rate.
If the taxable value of the medicine is ₹10,000:
For an intra-state transaction:
- CGST @ 2.5% = ₹250
- SGST @ 2.5% = ₹250
- Total GST = ₹500
For an inter-state transaction:
- IGST @ 5% = ₹500
Can Businesses Claim ITC on Medicines?
Input Tax Credit (ITC) depends on the nature of the outward supply and the normal eligibility conditions under GST law.
A registered business may generally claim eligible ITC on inputs, input services and other eligible purchases used for making taxable supplies, subject to the CGST Act and applicable conditions.
However, ITC cannot simply be claimed because a business deals in medicines.
For example:
- A manufacturer making taxable medicine supplies may be eligible to claim ITC on eligible business inputs.
- A distributor making taxable supplies may claim eligible ITC subject to the applicable conditions.
- Inputs attributable to exempt supplies may require reversal or restriction under the GST rules.
- Businesses making both taxable and exempt supplies may need to apply the relevant ITC apportionment provisions.
The official GST Council FAQ also explains why most medicines were retained at 5% rather than being fully exempt: a full exemption would prevent manufacturers/dealers from claiming ITC on GST paid on inputs, potentially increasing the cost embedded in the supply chain. Goods & Services Tax Council+1
How Should HSN 3004 Be Shown on a GST Invoice?
Where HSN 3004 is the correct classification, the invoice should contain the required invoice details, including the applicable HSN, product description, quantity, taxable value and GST details as applicable under GST invoicing rules.
For a medicine invoice, businesses should ensure that:
- The correct HSN is selected.
- The product description is accurate.
- The applicable GST rate is used.
- Taxable value is calculated correctly.
- CGST/SGST or IGST is applied correctly.
- Invoice details are properly recorded in accounting and GST records.
Using an outdated GST rate can result in incorrect tax collection and reporting.
What About MRP and GST on Medicines?
For medicines sold with a printed Maximum Retail Price (MRP), businesses should follow the applicable Legal Metrology and GST requirements.
GST should not simply be added again on top of an MRP that is already inclusive of applicable taxes.
For stock affected by a GST rate change, the government clarified during the 2025 rate changes that existing stock did not need to be recalled or relabelled solely for the rate change; manufacturers were required to issue revised price lists and share them with dealers, retailers and regulators, while billing was to reflect the revised rates. Press Information Bureau
Common HSN 3004 and GST Mistakes
Businesses dealing in medicines should avoid these common errors:
- Using HSN 3004 for every pharmaceutical product
- Confusing HSN 3004 with HSN 3002
- Applying the old 12% GST rate to medicines after the 2025 rate revision
- Assuming every medicine is taxable at the same rate without checking Nil-rate entries
- Treating every vitamin or supplement as HSN 3004
- Using an incorrect HSN subheading on invoices
- Claiming ITC without checking eligibility and exempt-supply restrictions
- Failing to separate taxable and exempt supplies in accounting records
- Using outdated GST rates in billing software
- Not checking the latest GST notification when a product's classification is unclear
Latest GST Rate on Medicines: Key Takeaways
As of 2026, the key change businesses should remember is:
- Most drugs and medicines are subject to GST at 5%.
- Specified life-saving medicines are Nil-rated.
- The revised rates took effect from 22 September 2025. Press Information Bureau+1
- HSN 3004 covers qualifying medicaments in measured doses or retail packaging.
- Not every pharmaceutical or healthcare product belongs to HSN 3004.
- The exact HSN classification should be verified before applying the GST rate.
- ITC eligibility depends on the nature of the supply and the applicable GST provisions.
The government specifically states that all drugs and medicines carry a concessional 5% GST rate except those specified at Nil rate. Goods & Services Tax Council+1
Conclusion
HSN Code 3004 is used for qualifying medicaments consisting of mixed or unmixed products for therapeutic or prophylactic use, supplied in measured doses or retail packaging.
The GST treatment of medicines has changed significantly since September 2025. The earlier 12% general GST rate for medicines is no longer the correct rate. Most drugs and medicines are now taxed at 5%, while specified life-saving medicines are taxed at Nil rate. Press Information Bureau+1
For pharmaceutical manufacturers, wholesalers, distributors and pharmacies, accurate HSN classification is therefore essential. Businesses should verify the product's complete tariff classification and the latest applicable GST notification before creating invoices or claiming ITC.
Other HSN Code Guides
FAQs on HSN Code 3004 and Medicine GST
What is HSN Code 3004?
HSN Code 3004 covers qualifying medicaments for therapeutic or prophylactic use that are put up in measured doses or in forms or packings for retail sale.
What is the GST rate for HSN 3004?
Most qualifying medicines under the relevant HSN 3004 classification are subject to 5% GST, while specified medicines covered by Nil-rate entries are exempt. The exact rate should be verified against the applicable GST notification.
Is GST on medicines 5% or 12%?
The general GST rate on drugs and medicines was reduced from 12% to 5% effective 22 September 2025, except specified medicines moved to Nil rate. Therefore, the old 12% general rate is outdated. Press Information Bureau+1
Are Ayurvedic medicines subject to GST?
Qualifying Ayurvedic medicaments can fall under HSN 3004. Following the 2025 GST rate rationalisation, the government stated that medicines including Ayurveda, Unani and Homoeopathy medicines were reduced from 12% to 5%. Press Information Bureau
What is the HSN code for Ayurvedic medicines?
Qualifying Ayurvedic medicaments supplied in the manner covered by the heading can fall under HSN 3004. However, classification should be verified based on the specific product and tariff description.
Are vitamins and supplements covered under HSN 3004?
Not automatically. Vitamins, nutraceuticals and dietary supplements must be classified according to their composition, formulation, intended use and applicable tariff heading. Businesses should not assume that all supplements belong to HSN 3004.
Can pharmacies claim ITC on medicines?
ITC may be available on eligible purchases used for taxable supplies, subject to the conditions and restrictions under GST law. Businesses making taxable and exempt supplies may need to apply the relevant ITC reversal or apportionment rules.
Which medicines are GST exempt?
Specified life-saving medicines covered by the applicable Nil-rate entries are GST-free. The 2025 GST reforms moved specified life-saving medicines from 12% to Nil and certain additional specified medicines from 5% to Nil. Press Information Bureau
When did the new GST rates on medicines take effect?
The revised GST rates for goods, including the changes applicable to medicines, took effect from 22 September 2025. Goods & Services Tax Council
What is the tax on medicine in India?
There is no single GST rate for every pharmaceutical product. As of 2026, most drugs and medicines are taxed at 5%, while specified medicines are Nil-rated. The exact treatment depends on the product's classification and applicable GST entry. Goods & Services Tax Council
What is the difference between HSN 3002 and HSN 3004?
HSN 3002 primarily covers specified biological products such as certain blood products, antisera and immunological products, whereas HSN 3004 covers qualifying medicaments in measured doses or retail packaging. The correct heading depends on the product's characteristics and tariff classification. Press Information Bureau