Sanitisers are disinfectants like soaps, Dettol: Finance Ministry on 18% GST

Amid outrage over 18% GST on alcohol-based hand sanitisers, the Ministry of Finance on Wednesday said it is a disinfectant like soaps and other anti-bacterial liquids and will attract similar tax.

The clarification was issued by the ministry after the Goa bench of Authority for Advance Ruling (AAR) had recently ruled that alcohol-based hand sanitisers will attract 18% duty under the Goods and Services Tax (GST) regime.

"It is stated that hand sanitisers attract GST at a rate of 18%. Sanitisers are disinfectants like soaps, anti-bacterial liquids, Dettol etc which all attract duty standard rate of 18% under the GST regime. The GST rates on various items are decided by the GST Council where the Central Government and all the state governments together deliberate and take decisions," it said.

The Finance Ministry further clarified that inputs for the manufacture of hand sanitisers are chemicals packing material, input services, which also attract a GST rate of 18%.

"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," it said, adding that lower GST rates help imports by making them cheaper.

"This is against the nation’s policy on Atmanirbhar Bharat. Consumers would also eventually not benefit from the lower GST rate if domestic manufacturing suffers on account of inverted duty structure," it added.