The government has given clarification on the imposition of 18 percent Goods and Services Tax (GST) on hand sanitizers. The government says that sanitizers are also disinfectants like soap, anti-bacterial liquids, Dettol, and others which attract 18 percent GST. The Finance Ministry has said in a statement that various chemicals, packing materials, and input services, which are used to make sanitizers, also attract GST at the rate of 18 percent.
“Like soaps, anti-bacterial liquids, Dettol and others, sanitizers are also disinfectants that attract a GST rate of 18 percent,” the statement said. The ministry said that reducing the GST rate on sanitizers and other items like this would upset the fee system and would not benefit domestic manufacturers.
Explaining the rationale behind this, the Ministry has further stated that reducing the GST rate will make the import of sanitizers cheaper if the raw material tax is more than the tax on the final product.
It states that a lower GST rate helps in reducing imports. It is against the policy of self-reliant India of the country. If domestic manufacturers are affected due to deteriorating tax structure, then consumers will also not get the benefit of lower GST.
The Goa bench of the Authority of Advance Ruling (AAR) recently ruled that alcohol-based hand sanitizers would be taxed at the rate of 18 percent under the GST. Although the Ministry of Consumer Affairs had placed hand sanitizers in the category of essential commodities, the list of exempted items under the GST Act is different.
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