The Authority for Advance Ruling (AAR) has said that a GST of 18 per cent will be levied on all alcohol-based hand sanitisers as they come under the category of 'alcohol-based hand sanitisers.' The ruling came in response to a petition by the Goa-based Springfield India Distilleries, which had ventured into the manufacturing of alcohol-based sanitisers.
Springfield India Distilleries had approached the Goa-bench of AAR to seek clarity on classification of hand sanitisers supplied by it and to know whether these sanitisers would be exempt from GST as the Consumer Affairs Ministry had classified hand sanitisers as an essential commodity.
The Authority said, "It is of the opinion that hand sanitizers manufactured by the applicant are of the category of Alcohol-based sanitisers and are classifiable under heading 3808 of HSN to which rate of GST applicable is 18 per cent."
The ministry of consumer affairs had classified hand sanitisers as an essential commodity, but the GST law has a separate list of exempted goods, the authority emphasized in its ruling.
Meanwhile, the finance ministry has ruled out reduction in duty for hand sanitisers. "Reducing the GST rate on sanitizers and other similar items would lead to an inverted duty structure and put the domestic manufacturers at a disadvantage vis-a-vis the importers of hand sanitizers. Lower GST rates help imports by making them cheaper. This is against the nation's policy on ‘Atmanirbhar Bharat'. The consumers would also eventually not benefit from the lower GST rate if domestic manufacturing suffers on account of inverted duty structure," the finance ministry said..
Sanitizers are disinfectants such as soaps, anti-bacterial liquids and dettol, which attract standard duty at the rate of 18 per cent under the GST regime. The GST rates on various items are decided by the GST Council, where the Central Government and all state governments deliberate and take collective decisions.
Health authorities worldwide have been recommending the use of alcohol-based hand sanitizers, containing at least 60 per cent alcohol, to keep the dreaded Covid19 virus at bay in the absence of any vaccine till date.