18% GST on Hand Sanitizers | Fusion - WeRIndia

The Finance Ministry said that hand sanitizers and disinfectants attract 18 per cent duty under the Goods and Services Tax (GST) regime.

They are like soaps; hence GST of 18 per cent will be levied on them. Various chemicals, packing materials, anti-bacterial liquids, Dettol etc. attract a standard GST rate of 18 per cent.

The Finance Ministry also said that the reduction in GST rate would not help the manufacturers and consumers.

Recently, the Goa bench of the GST Authority of Advance Ruling (AAR) held that alcohol-based sanitizers will attract GST of 18 per cent. Though they fall under the essential category, they cannot be exempt from GST.

In this context, clarification is sought from the government whether the hand sanitizers would be exempt from GST as the consumer affairs ministry has classified them as an essential commodity.

The Ministry clarified that they attract a GST rate of 18 per cent and expressed that the reduction in the tax would lead to an inverted duty structure.

As a result, importing sanitizers will become cheaper. The domestic manufacturers will be at a disadvantage and not get any benefit from this move.

If the raw materials are taxed at a higher rate than the end product, then it causes loss to manufacturers. At the same time, consumers will also not get benefit if domestic manufacturers suffer from inverted duty structure.

The Ministry also said that reduction in GST is against its Atmanirbhar Bharat policy as imports will become cheaper and eventually lead to the loss of domestic manufacturers.

For all these reasons, sanitizers would not be exempt from the GST and will fall under the category of 18 per cent. GST should be paid on it even though they are classified as an essential item.

Image by Ri Butov from Pixabay (Free for commercial use)

Image Reference: https://pixabay.com/photos/hand-sanitizer-sanitiser-hygiene-4954459/