Hand sanitisers are essential commodity but will attract 18% GST for this reason

The Authority for Advance Ruling (AAR) has said that a GST of 18 per cent will be levied on all alcohol-based hand sanitisers. (Bloomberg image)

Even as the government classifies hand sanitisers as an essential commodity, you will have to pay 18 per cent GST to buy them. The Authority for Advance Ruling (AAR) has said that a GST of 18 per cent will be levied on all alcohol-based hand sanitisers. Merely classifying any goods as an essential commodity will not be the criteria for exempting such goods from GST, the AAR ruling added. In the plea filed by Springfield India Distilleries to the Goa-bench of AAR, seeking a 12 per cent GST on hand sanitisers supplied by the company, the AAR said that 18 per cent GST will be applicable on them as they are alcohol-based hand sanitisers.

Sanitiser market in India dramatically mushroomed after coronavirus infection started to spread across the country. While the high demand led the medical shops to run out of stock, multiple illegal productions were also spotted. The size of the sanitiser market touched Rs 43 crore in March from Rs 10 crore a year ago, according to Nielsen India. It is also eident that nearly 152 new manufacturers started making sanitisers in the month of March, securing 61 per cent market and 46 per cent value share.

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Meanwhile, last month, the Central Economic Intelligence Bureau alerted GST authorities about manufacturers of alcohol-based hand sanitisers paying 12 per cent GST by wrongly classifying them as medicaments instead of disinfectants, which attract an 18 per cent GST. The GST intelligence had also cited the evidence as an incident of tax evasion. With today’s ruling, it has now become clear that alcohol-based hand sanitisers will attract 18 per cent tax.

Since no vaccine could be made so far to cure Covid-19, people are only left with face masks and hand sanitisers to keep them away from the viral infection. The awareness created by the medical practitioners, governments, and the World Health Organisation (WHO), has led to a rapid increase in the usage of hand sanitisers across the world.