Govt. says, GST rate reduction on sanitizers would help neither manufacturers nor consumers

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National News

Jul 15, 2020

6:54PM

Govt. says, GST rate reduction on sanitizers would help neither manufacturers nor consumers

AIR

The government today said, reduction in the GST rate would help neither manufacturers nor consumers. The issue of GST rate on alcohol based hand sanitizers has been reported in a few sections of media.

In a release, the government clarified that sanitizers attract GST at the rate of 18 per cent. Sanitizers are disinfectants like soaps, anti-bacterial liquids and dettol which all attract a duty standard rate of 18 per cent under the GST regime. 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.

Chemicals, packing materials and input services used for manufacture of hand sanitizers also attract a GST rate of 18 per cent. Reducing the GST rate on sanitizers and other similar items would lead to an inverted duty structure and put the domestic manufacturers at a disadvantage vis-a-vis the importers of hand sanitizers.

Lower GST rates can only help imports by making them cheaper. This is against the government’s policy on Atmanirbhar Bharat. Consumers would also eventually not benefit from the lower GST rate if domestic manufacturing suffers on account of inverted duty structure.