India Pharma Outlook Team | Saturday, 11 October 2025
The Association of Indian Medical Device Industry (AiMeD) has indeed welcomed the initiative taken by the Indian Government to speed up GST refunds for exporters and manufacturers, describing it as a feasible measure to free up the industry's working capital flow.
With the new modality designed by the Central Board of Indirect Taxes and Customs (CBIC), 90% of refund amounts for low-risk cases will be released upfront for applications filed on or after October 1, 2025. This provision covers not only exports but also the inverted duty structure (IDS) cases.
"This measure can be a major advantage especially for MSMEs that have suffered a shortage of working capital due to delayed GST refunds, a situation that has occurred over the years," said Rajiv Nath, Forum Coordinator, AiMeD.
AiMeD emphasized that in its phase 2, GST should also be extended to cover refunds for input services and capital goods, such as logistics, machinery, and specialized services for the industry so that neutrality could be ensured in the tax system.
The medical-device sector is one example where the problem of IDS is prevailing the inputs like plastic which is taxed higher than the final product.
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Quick refunds would lower the cost of borrowing and thus work as a positive enhancer to the cash flow and consequently the company will be able to invest more and export with the increased capacities.
"Intercepting input services and capital goods will not only make the 90% upfront refund more comprehensive and compatible with GST's original conception but also be more practical," said Nath.
