Alcohol-based hand sanitisers to be taxed at 18 per cent under GST: Centre

New Delhi, July 16 (KNN) Amid several reports which has been reported in few sections of media on the issue of GST rate on alcohol based hand sanitizer, the Finance Ministry has finally stepped in and clarified that alcohol-based hand sanitisers will be taxed at 18 per cent under the Goods and Services Tax (GST).

''The inputs for manufacture of hand sanitisers are chemicals packing material, input services, which also attract a GST rate of 18 per cent. 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,'' said the Finance Ministry in a statement on Wednesday.

''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," the ministry further clarified.

The clarification comes a day after the Authority for Advance Ruling (AAR) established that alcohol-based hand sanitisers will be taxed at 18 per cent under the Goods and Services Tax (GST).

The order from Goa bench of AAR was in response to a query by Springfield India Distilleries on classification of hand sanitisers and the GST rate they attract. The company had contended that the product is taxed at 12 per cent. Springfield had also sought an opinion on whether hand sanitisers are classified as essential commodities, and thus, would be exempt from GST.

The Ministry further said that sanitisers are disinfectants like soaps, anti-bacterial liquids, etc. which all attract a duty standard 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 the state governments together deliberate and take decisions," the Finance Ministry added.