Govt justifies 18% GST on hand sanitisers

The government Wednesday declined to give in to the demand of reduction in the GST rates of hand sanitisers saying it would continue to attract 18% GST levy to encourage domestic manufacturers and discourage its cheap imports

Demand for withdrawal of GST on hand sanitisers had come from various quarters including the Indian Medical Association amid rising demand for the disinfectant during Covid-19.

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The government, however, said sanitisers are disinfectants like soaps, anti-bacterial liquids, dettol, among others, which attract 18% under the GST regime.

In a statement, the Finance Ministry said various chemicals, packing materials and input services, among others, used for manufacturing hand sanitisers also attract a GST rate of 18%.

“We understand that certain ingredients (in sanitisers) are taxable, still in these difficult times or at least for next few months, hand sanitisers should not attract GST,” Sandeep Sharma, President of IMA, Delhi branch, had recently said.

The finance ministry, in a statement, however, said that lowering GST rates would make importing sanitisers cheaper as domestic industry would be at a disadvantage if raw materials are taxed at higher rate than the end product.

"Lower GST rates help imports by making them cheaper. This is against the nation'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," it added.