Sanitary napkin cos eye GST coverage

Input tax credit means reducing the taxes paid on inputs from the taxes to be paid on output or the final product.

The GST Council, which has called a special meeting on Saturday to deal with the problems of small and medium industries, may take up an unprecedented issue of sanitary napkin manufacturers, who now want to come under GST levy.

After a lot of hue and cry for over a year, the government in the last meeting had bitten the proverbial bullet and brought all GST levies on the sanitary napkins to zero. Earlier, the napkins were taxed at 12%.

Now, the industry body for sanitary napkins Feminine and Infant Hygiene Association of India has written to Finance Minister Piyush Goyal seeking to come under the GST net that will allow them to claim the input tax credit under the GST.

Input tax credit means reducing the taxes paid on inputs from the taxes to be paid on output or the final product.

Under a nil-tax GST regime, a final manufacturer cannot claim input tax credit even if he or she has paid on certain raw materials or machinery in the chain of manufacturing. In case of sanitary napkins, manufacturers pay taxes on raw material such as wood pulp, release paper, adhesives, packing material to the tune of 12% to 18%.

The sanitary napkin manufacturers body is of the opinion that at least 0.1% GST should be levied on the manufacturers so that they can claim the tax credit when they bring out the final product. That will also give them the margin to pass on the benefits to the consumers.

In absence of input tax credit, the sanitary napkin-makers have increased the base price of the pads as a result of which there is no great benefit to consumers.

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Sanitary napkin cos eye GST coverage

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