Opinion | GST 2.0: Empowering Innovation In Healthcare Simulation | Opinion News

Last Updated:September 14, 2025, 18:59 IST

GST 2.0 is not just a reform but a springboard for a healthier, innovative future

There has been confusion among buyers that if they require to reverse ITC, given the supplier issues commercial or financial credit notes post the supply. 

India’s Goods and Services Tax (GST) Council has ushered in a transformative era with the unveiling of what is being touted as “GST 2.0″ reforms, effective from 22 September 2025. These changes, announced after the Council’s meeting on 4 September 2025, streamline tax slabs primarily into 5 per cent and 18 per cent categories, with a 40 per cent slab reserved for luxury and sin goods.

Designed to reduce consumer costs, stimulate demand, and bolster innovation, these reforms hold profound implications for sectors like electronics and healthcare, where technology drives progress. By maintaining stability in certain IT hardware categories and slashing rates on critical medical and display equipment, the government is laying a robust foundation for integrating advanced technologies into healthcare delivery and training.

The decision to retain the 18 per cent GST rate on computers and virtual reality (VR) consoles ensures stability for industries reliant on these technologies. VR consoles, classified under electronics, are pivotal for applications like immersive training simulations, including those used in medical education for surgical practice or therapeutic interventions. This unchanged rate provides predictability for businesses navigating global supply chain challenges.

The IT hardware sector, contributing approximately 3.5 per cent to India’s GDP and employing over 4 million people, benefits from this consistency, fostering continued investment in research and development. As per a 2024 Deloitte report, stable tax regimes in tech sectors have historically boosted R&D spending by 12-15 per cent annually, enabling advancements in areas like VR-driven simulations.

A significant reform is the reduction of GST on monitors, projectors, and television sets from 28 per cent to 18 per cent. These devices are critical for high-resolution displays used in VR setups, such as those for medical training or diagnostic visualisations. The rate cut is expected to lower end-consumer prices by 7-10 per cent, spurring demand in educational institutions and healthcare facilities.

Historical data from the Consumer Electronics and Appliances Manufacturers Association shows that similar tax reductions have driven a 15-20 per cent surge in sales of display devices, potentially accelerating adoption of VR technologies in resource-constrained settings. Lower costs for such hardware enable institutions to allocate budgets towards software enhancements or broader deployment of simulation-based training, enhancing skill development in critical fields.

Equally impactful is the rationalisation of GST on electro-medical apparatus and medical instruments to a uniform 5 per cent, down from 12 per cent or 18 per cent. This encompasses diagnostic tools, glucometers, and surgical instruments, alongside zero GST on health and life insurance. Such reductions directly lower the cost of medical devices, which is crucial when integrating VR systems with diagnostic or simulation hardware.

For instance, combining VR headsets with real-time imaging devices for virtual procedures like endoscopy becomes more affordable, with potential cost savings of up to 10 per cent on bundled setups. A 2025 EY report notes that India’s healthcare sector, where out-of-pocket expenses constitute nearly 60 per cent of spending (compared to a 20 per cent global average), stands to benefit significantly, with patient costs potentially dropping by 5-8 per cent for advanced diagnostics. These savings enhance affordability, particularly in rural areas, where access to cutting-edge medical technology remains limited.

The government’s strategic rationalisation of GST rates reflects a commitment to fostering innovation. Prime Minister Narendra Modi captured this vision, stating: “The rationalisation of Goods and Services Tax is the biggest reform since Independence.” He further described GST 2.0 as a “double dose” for India’s growth, highlighting its potential to drive consumption and investment.

Economic projections align with this optimism, with analysts estimating a 0.2-0.3 per cent GDP boost in FY26 due to increased spending in health and tech sectors. By reducing fiscal barriers, these reforms create an ecosystem where advanced technologies, such as VR-integrated healthcare solutions, can thrive, benefiting both providers and patients.

Looking to the future, India’s tax policy could further catalyse technological leaps. A forward-thinking approach might include targeted GST rebates for R&D in AI-VR convergence, enabling real-time predictive simulations for patient outcomes. Zero-rating exports of health tech could position India as a global hub, leveraging its projected $500 billion digital health market by 2030. Dynamic tax frameworks, adjusted based on innovation metrics like patent filings, could incentivise breakthroughs in medical VR. Collaborations between the GST Council and the National Health Authority could establish ‘sandbox’ environments, testing subsidised VR-medical solutions to bridge urban-rural healthcare gaps.

By aligning fiscal policy with technological advancement, India can lead a global revolution in accessible, simulation-driven healthcare, ensuring that GST 2.0 is not just a reform but a springboard for a healthier, innovative future.

Dr Kirit P. Solanki is former Member of Parliament, Lok Sabha, and a former member of standing committee for finance. Sabarish Chandrasekaran is co-founder & CEO, MediSim VR. Views expressed are personal and do not necessarily reflect News18’s editorial stance.

Read More