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GST exemption on sanitary pads: Whom does it benefit?

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AFP PHOTO / INDRANIL MUKHERJEE

The GST Council in its 28th meeting approved rate reductions for 88 consumer-centric items which included the widely demanded exemption on sanitary napkins on Saturday. A number of women politicians, cutting across party lines, welcomed this decision by the government.

Finance minister Piyush Goyal announced that sanitary pads are now 100 percent exempt from GST. “In a remarkable move, Piyush Goyal during the 28th GST Council Meet announced to exempt Sanitary Napkins from the GST. Indeed, this will give the required thrust to our Menstrual Hygiene initiatives and will transform lives of many Women,” Union Women and Child Development Minister Maneka Gandhi tweeted.

Sanitary pads, which were initially taxed at 18 per cent, were brought down to 12 per cent under GST that was launched in July 2017. Gandhi, however, earlier had justified the imposed tax saying that scrapping it would kill the indigenous pad makers.

Social media was flooded about how this decision would ‘empower’ women and ensure menstrual hygiene among a large number of women. This however, could be a stretch on the reality of this issue.

The exemption of GST on sanitary napkins means that the input tax credit will be snatched from the manufacturer. According to experts, the reduction may not be significant as the exemption will make manufacturers increase the price of the product on an overall basis. So in reality there might not even be a price drop. Assuming that the price may not be affected, it would still not translate to women in rural areas using sanitary products.

AFP PHOTO / INDRANIL MUKHERJEE

It is going to adversely affect the manufacturers who are trying to create availability of cheaper sanitary napkins. For a well-known brand that sells a pack for Rs 70-80 may result in a deduction of nearly Rs 10. But for the cheaper versions, this move may be negligible.

AFP PHOTO / INDRANIL MUKHERJEE

According to Arun Jaitley, “If you did away with that 12% and brought that down, you probably won’t have any Indian manufacturer left, it will be only the Chinese products which will be sold in the Indian market.”

The ideal move for this campaign should be how sanitary napkins can be made available to women from the most fragile financial sections. Because for those who use branded pads are nowhere to stop using them regardless the price fluctuation. The recent exemption would hardly make a difference to these women who still find it an unnecessary expenditure.

The welcoming of this decision might take away the focus away from the real problem of how these amenities should be a matter of necessity and not luxury.