Now Get Ready To Pay 18% GST For Alcohol-Based Hand Sanitisers

Courtesy: YouTube.com

Goa-bench of the GST-Authority for Advance Rulings (AAR) has held that alcohol-based hand sanitizers, manufactured by a local company, will be taxed at 18%.

Courtesy: YouTube.com

Springfield India Distilleries had approached the AAR to seek a ruling on the classification of its product and the applicable Goods and Services Tax (GST) rate. It had also sought a ruling on whether the hand sanitizers produced by it would be classified as an exempt commodity and thus exempt from GST.

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In its order pronounced late last month, the AAR bench candidly stated that “Merely classifying any goods as an essential commodity will not be the criteria for exempting such goods from GST.”

The ruling corroborates the stand taken by the GST authorities. Recently, the Central Economic Intelligence Bureau, alerted the GST authorities that manufacturers of alcohol-based sanitisers were paying 12% GST by wrongly classifying the product under a different heading and treating it as ‘medicaments’.

Following this, GST field officers began to conduct inspections to determine the misclassification and consequent GST loss. Industry associations have petitioned to the Ministry of Finance to plead their case of a lower GST rate.

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