Centre defends 'high' GST rates on sanitary napkins, disability aids
The Centre came under criticism for implementing a 12% tax on sanitary pads and 5-15% tax on disability aids under GST. Several quarters had accused it of overlooking basic needs of women and disabled. However, the government has now said the focus of the decision was safeguarding local manufacturers from excessive tax gaps between intermediate and finished goods. This wasn't the only reason though.
12% GST on sanitary napkins had garnered widespread criticism
Earlier, activists launched #LahuKaLagaan, an online campaign against napkins being taxed. When the new tax on napkins were fixed at 12% despite the campaign, it drew massive criticism, especially as sindoor, bindi and bangles were declared tax-free.
'12% for the sake of local manufacturers, balanced tax burden'
A GST Council official explained the decision had been discussed "in detail". Firstly, raw materials are mostly taxed higher at 18%. Wide difference between taxes on intermediate and finished goods would leave local firms with unusable tax credits. Though companies can ask for refund, it is a time-consuming process. Plus, "a 12% rate is at par with earlier tax burden".
Local manufacturers, especially in rural areas, burdened under input taxes
The sanitary pads market in rural areas is dominated by low-cost local products by NGOs, SHGs or small start-ups. Thus high taxes on inputs would increase pressure on them while bringing relief for imports which make 25% of the Indian market.
The case is similar with disability aids, says Finance Ministry
Rejecting Congress's criticism that the Modi government was being "insensitive", the finance ministry said most intermediate goods in this sector are also taxed higher at 18%. Hence exempting products from GST would force local manufacturers to pay input taxes while imports would get relief. Also, 22 assistive devices including Braille typewriters, wheelchairs and artificial limbs would have a concessional 5% GST rate.
