All drugs and food for special medical purposes, imported for personal use for the treatment of all rare diseases listed under the National Policy for Rare Diseases 2021, have been exempted from basic customs duty by the central government.

The new duty exemption

  • The exemption has been granted by the Central Board of Indirect Taxes and Customs (CBIC).
  • It has been granted by substituting “Drugs, Medicines or Food for Special Medical Purposes (FSMP)” instead of “drugs or medicines”.
  • Now, in order 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.
  • Exemptions have already been provided to specified drugs for treatment of spinal muscular atrophy or duchenne muscular dystrophy.

Need for exemption:

  • Drugs or special foods required for the treatment of these diseases are expensive and need to be imported.
  • This exemption will result in substantial cost savings and provide much needed relief to the patients.

What is the tax on life-saving drugs and medicines?

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.

What is a Rare Disease?

  • A rare disease is a health condition of low prevalence that affects a small number of
    people compared with other prevalent diseases in the general population.
  • It is estimated that globally around 6000 to 8000 rare diseases exist with new rare diseases
    being reported in the medical literature regularly.
  • However, 80% of all rare disease patients are affected by approximately 350 rare diseases.
  • Rare diseases include genetic diseases, rare cancers, infectious tropical diseases and
    degenerative diseases.
  • 80% of rare diseases are genetic in origin and hence disproportionately impact children.
  • There is no universally accepted definition of a rare disease.
  • Different countries define rare diseases differently.


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