Govt Imposes 18% GST On Alcohol-Based Hand Sanitizers During Coronavirus: Unfair Decision?

18% GST For Alcohol-Based Sanitizers During Coronavirus: Unfair Decision By Govt?
Govt Imposes 18% GST On Alcohol-Based Hand Sanitizers During Coronavirus: Unfair Decision?

In a shocking development, Govt has imposed 18% GST on alcohol-based hand sanitizers.

Since coronavirus pandemic is refusing to slowdown, hand-sanitizers, especially alcohol based are in much demand to keep oneself uninfected and safe.

Should Govt reconsider this decision?

18% GST On Alcohol-Based Hand Sanitizers

In a recent case, Springfield India Distilleries, which manufacturers alcohol-based hand sanitizers had approached Goa-bench of Authority for Advance Ruling (AAR) to seek clarity on the GST calculation for their product.

They had argued that since hand sanitizers are an essential commodity these days, there should be no GST on this product.

Springfield India Distilleries has approached AAR to challenge 12% GST on the hand sanitizers.

However, to their shock, Authority for Advance Ruling (AAR) has ruled that all alcohol based hand-sanitizers will be charged 18% GST, which is the highest slab of GST.

At the same time, AAR informed that Ministry of Consumer Affairs has indeed classified hand-sanitizers as essential commodity, but GST rules are different, and as per the GST law, there is a separate list of exempted goods from GST, and hand-sanitizers, and alcohol-based hand sanitizers are not covered in this.

Should Govt Reconsider This Decision?

Since everyone is mandated by Govt to use masks and hand-sanitizers, and WHO as well as all doctors strongly recommends everyone to use hand sanitizers, the decision to impose 18% GST is indeed baffling.

Due to this charges, alcohol-based hand sanitizers will be expensive, and people will be forced to pay more for the same.

Despite being an essential commodity, 18% GST on hand sanitizers is unfair.

Resonating this views, EY Tax Partner Abhishek Jain said, “Given its significance during the pandemic and with multiple players now into manufacturing of this product, the government should consider issuing an explicit clarification to control unwarranted litigation on this aspect,”

We will keep you updated, as more details come in. 

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