New Delhi: Alcohol-based hand sanitisers will attract 18 per cent Goods and Services Tax (GST), according to a ruling by Authority for Advance Ruling (AAR).
The ruling came in the case of Springfield India Distilleries which had approached the Goa bench of AAR to seek classification of hand sanitisers supplied by the company and its contention was that a 12 per cent GST levy is attracted on the hand sanitiser.
The company also sought to know if sanitisers would be exempt from GST since it is now an essential commodity.
The Goa bench of AAR in its ruling, said since hand sanitisers manufactured by the company are of the category of 'alcohol-based hand sanitisers', a 18 per cent GST would be applicable.
The authority further said that although the Ministry of Consumer Affairs has classified hand sanitisers as an essential commodity, the GST law has a separate list of exempted goods.
Experts say that since it was classified as an essential commodity due to the Covid-19 pandemic and given that the Covid-19 pandemic is ongoing, the government will have to provide a clarification on the taxation of the product.
The AAR is inconsistent with the view taken by GST authorities as well of a rate of 18 per cent being applicable on hand sanitisers.