Alcohol – based Hand Sanitizers to be Taxed 18% GST, ruled AAR

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

The ruling came in the matter when Springfield India Distilleries approached the Goa-bench of AAR for classification of hand sanitisers supplied by the company. The company had contended that their product is taxed at 12 per cent. Additionally, it sought clarification on whether hand sanitizers be exempted now as they are now an essential commodity as classified by Ministry of Consumer Affairs. 

The AAR, in its ruling, said since hand sanitisers manufactured by the applicant are of the category of ‘alcohol-based hand sanitisers’, a 18 per cent GST would be applicable. Also, merely classifying any goods as essential commodity will not be the criteria for exempting such Goods from GST.

The GST law has a separate list of exempted items that are different from Ministry of Consumer Affairs. The latter had classified hand sanitisers as an essential commodity. 

“The Ruling is aligned to the view taken by GST authorities as well of a rate of 18% being applicable on hand sanitizers. The classification of hand sanitizers has been a matter of debate since inception especially given the multiple entries in which it could warrant classification because of its composition and uses. 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,” Abhishek Jain, Tax Partner, EY said.

Source: The Hindu

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