HSN Code 3004: Product Classification, GST Rate & Business Filing Guide

3004 HSN Code covers finished medicines sold in measured doses or retail packs, including tablets, capsules, syrups, injections and ointments. For businesses dealing in these products, the correct classification directly affects GST rates, input tax credit claims, invoice accuracy and compliance under GST.

After the GST rate rationalisation was approved at the 56th meeting of the Goods and Services Tax (GST) Council, many businesses began reviewing their classifications and tax slabs. Under the Harmonised System of Nomenclature (HSN) 3004, GST treatment depends on the specific type of medicament and the relevant notification entry, not just the heading number itself.

What are the product classification under HSN 3004

Here is the breakdown of product classification under HSN 3004:

How does HSN 3004 differ from related HSN codes?

3004 HSN Code applies to medicaments put up in measured doses or retail packs, so the key to correct classification is understanding where it differs from other headings within Chapter 30.

• 3002: Human blood, vaccines, antisera, immunological products and gene therapy products.
• 3003: Medicaments in bulk or non-retail forms, not put up in measured doses for retail sale.
• 3005: Wadding, gauze, bandages and similar coated or impregnated articles for surgical use.
• 3006: Pharmaceutical goods such as sterile surgical catgut, blood-grouping reagents, dental fillings and first-aid kits.

The distinction between 3003 and 3004 is especially important. HSN 3003 applies to bulk pharmaceutical preparations not put up in retail form, while HSN 3004 applies once the same formulation is measured, dosed and packaged for direct consumer or patient use.

What is the GST rate structure under HSN 3004: Post 56th GST Council Meeting (effective 22 September 2025)

From 22 September 2025, the 3004 HSN Code GST rate depends on the type of medicament and the relevant notification entry. This makes correct classification important for applying the right tax rate and avoiding invoicing or compliance errors.

The pharmaceutical sector, and HSN 3004 in particular, saw some of the most significant changes in the 3-4 September 2025 meeting of the GST Council.

Category 1: Nil GST (0%)

The Council reduced GST on 33 life-saving medicines from 12% to Nil, and on 3 critical medicines from 5% to Nil. These medicines are used to treat conditions such as:

• Cancer and rare diseases
• Renal (kidney) disorders
• Epilepsy and severe neurological conditions
• Heart conditions
• HIV/AIDS and tuberculosis (TB)
• Rare genetic disorders

Specific drugs granted Nil GST include Agalsidase Beta, Imiglucerase, Eptacog alfa, Onasemnogene abeparvovec, Asciminib, Mepolizumab, Pegylated Liposomal Irinotecan and Daratumumab, along with other medicines listed in Notification 9/2025-CT(Rate).

Other products that continue at a Nil rate include oral rehydration salts (ORS) and contraceptives supplied under public health programmes.

Category 2: 5% GST

After the 56th Council meeting, most finished medicaments under 3004 HSN Code, including a large number of branded and generic prescription drugs, are subject to 5% GST. This is a significant reduction for medicines that earlier attracted 12% GST.

Products taxed at 5% under HSN 3004 include:

• Antibiotics such as penicillins, cephalosporins and macrolides
• Anti-diabetic drugs, including insulin formulations
• Antihypertensive medicines
• Analgesics and anti-inflammatory drugs
• Respiratory medicines such as salbutamol and terbutaline
• Anti-malarial formulations
• Ayurvedic, Unani and Homoeopathic medicaments packaged for retail sale
• Homeopathic formulations
• Veterinary medicaments for retail sale

Category 3: 18% GST

Some products that fall under, or are closely related to, HSN 3004 may attract 18% GST. These often include nutraceuticals, vitamin and mineral supplements not treated as essential medicines and over-the-counter wellness products.

This usually applies when a product is classified as a health supplement rather than a therapeutic medicament. The final GST rate depends on the product’s regulatory status and the correct HSN sub-code.

What is the GST compliance and filing guide for businesses dealing in HSN 3004 goods

If you deal in goods classified under HSN 3004, correct registration, invoicing, return filing and input tax credit treatment are important for GST compliance.

GST registration requirements

Any pharmaceutical manufacturer, wholesaler, distributor or pharmacist with an annual aggregate turnover above ₹40 lakh must register under GST. In special category states, the threshold is ₹20 lakh.

Businesses making interstate taxable supplies may also need to register for GST in certain cases, even if their turnover is below these limits.

E-invoicing

If your pharmaceutical business has an aggregate annual turnover of more than ₹5 crore, e-invoicing is required for applicable B2B transactions.

Ensure invoices list the correct HSN code under Chapter 30 to avoid reporting errors.

Returns to file

When dealing in goods under HSN 3004, the main GST returns include:

• GSTR-1: Filed monthly or quarterly to report sales and outward supplies.
• GSTR-3B: Filed monthly to declare tax liability and claim eligible input tax credit.
• GSTR-9: Annual return, applicable based on the prescribed turnover limits.
• GSTR-9C: Reconciliation statement, required for businesses covered under the current GST rules.

ITC claim rules for pharma businesses

Where medicines are taxable at rates such as 5% or 18%, eligible input tax credit can generally be claimed on raw materials, input services and capital goods used for taxable supplies.

If supplies are Nil-rated or exempt, input tax credit is generally not available on inputs used exclusively for those goods. Where common inputs are used for both taxable and exempt supplies, ITC may need to be reversed proportionately under GST rules, including Rule 42 of the CGST Rules.

Pharmacies, hospitals and chemists purchasing stock for resale can claim eligible ITC, subject to compliance conditions and restrictions linked to exempt supplies.

Conclusion

For businesses dealing in HSN 3004 goods, correct product classification should be treated as an ongoing compliance process, not a one-time exercise. Since GST treatment under HSN 3004 can vary based on the type of medicament and the applicable notification entry, regular checks help prevent tax mismatches, input tax credit issues and reporting errors.

Review new product launches, supplier updates and packaging changes monthly and ensure the billing and warehouse teams can identify classification mismatches before goods are dispatched.

Using structured business management software such as TallyPrime can help keep records organised, improve reconciliation accuracy and make your business better prepared for audits, return filings and day-to-day GST compliance.