As a debate rages over the GST on hand sanitisers, the Union government on Wednesday clarified that alcohol-based hand sanitisers will continue to be levied at the standard rate of 18 per cent, as the product is a disinfectant like soaps and not a medicament.
When the Consumer Affairs Ministry classified hand sanitisers as essential commodities in wake of the Covid-19 pandemic, there had been a demand in certain sections of the industry, particularly liquor and sugar sectors, to classify sanitisers in the medicament category, so that it can attract a lower 12 per cent duty.
"It is stated that hand sanitisers attract GST at the rate of 18 per cent. Sanitisers are disinfectants like soaps, anti-bacterial liquids, Dettol etc, all of which attract duty at the standard rate of 18 per cent under the GST regime," a Finance Ministry statement said.
"It is further clarified that inputs for manufacture of hand sanitisers are chemicals, packing material, input services, which also attract a GST rate of 18 per cent. Reducing the GST rate on sanitisers and other similar items would lead to an inverted duty structure and put the domestic manufacturers at disadvantage vis-a-vis importers," the statement added.