Government to impose 18% GST on Alcohol-based sanitisers that keep Corona at bay

Medicines and medical kits are the life-savers and therefore it is mandatory to have an idea of what rate they are taxed at as ultimately it is going to affect the end price at which they are sold. The government on Wednesday, July 15th said that sanitisers are disinfectants like soaps and anti-bacterial liquids among others, which attract 18% duty under the GST regime. 

“Sanitisers are disinfectants like soaps, anti-bacterial liquids, Dettol, etc., which all attract duty standard rate of 18 per cent under the GST regime,” Reducing the GST rate on sanitisers and other similar items would lead to an inverted duty structure and put domestic manufacturers at a disadvantage vis-a-vis importers of hand sanitisers, the finance ministry informed. 

"Lower GST rates help importers by making them cheaper. This is against the nation’s policy on Atmanirbhar Bharat. Consumers would also eventually not benefit from lower GST rate if domestic manufacturing suffers on account of inverted duty structure," the Centre explained. They further added that the inputs for the manufacture of hand sanitisers – chemicals, packing material, input services – also attract a GST of 18%. 

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The GST rates on various items are decided by the GST Council, where the central government and all the state governments together deliberate and take decisions, the statement noted.

Authority for Advance Ruling (AAR) had announced the decision after Springfield India Distilleries had approached its Goa-bench to seek classification of hand sanitizers supplied by the company, and contended that the product is taxed at 12 percent. It had also sought to know if sanitizers would be exempt from GST as they came under the ambit of an essential commodity. 

The government also maintained that consumers would also eventually not benefit from the lower GST rate if domestic manufacturing suffers on account of inverted duty structure. 

Health authorities from all over the globe have been recommending the use of alcohol-based hand sanitizers that contains at least 60 per cent alcohol.

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