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Ayurvedic Ingredient Based Sanitizers Within 12% GST Bracket: P&H HC directs GST Authority
GST Authority To Consider Plea For Re-Classification Of Ayurvedic Ingredient Based sanitizers Within 12% GST Bracket: Directs P&H HC
A PIL seeking for reclassification of "AUS ingredients based sanitizer" within 12% GST Tariff bracket instead of 18% was disposed of by the Punjab and Haryana HC with direction to the GST Authority to consider the same on Tuesday.
The writ petition was filed by the Haryana Ayurvedic Drugs Manufacturers Association against show cause notices issued by the Taxation authorities to the manufacturers of the AUS ingredients based sanitizer for accumulating the GST at the tax rate of 18% under under the HSN 3808. This was disposed by the bench comprising of Justice Jaswant Singh and Justice Ashok Kumar Verma.
The petitioners asserted that the show cause notices were issued incorrectly by the respondent. They contend that the authority (respondent) were under a misbelief that AUS ingredients based sanitizers are alcohol based. It was then submitted that these sanitizers are Ayurvedic/ Unani/ Sidha (AUS) ingredient based sanitizers thus making them absolutely different from alcohol based ones.
The petitioners also informed the court that a representation explaining the same was sent to the Authority but produced no results.
However the court observed that, "It is hoped that the same shall be taken up for consideration by the Council at the earliest, considering the issue involved." Senior Advocate Sunish Bindlish, appearing on behalf of the authority assured that the representation shall be sent to the establishment of the GST Council for appropriate consideration and upon this the matter was disposed.
The disinfectants apart from insecticides, herbicides, plant-growth regulators, etc. and attracts the GST rate of 18% and are covered under Tariff Heading 3,808 whereas, Heading 3,004 covers the Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses and attracts the GST rate of 12%. These two headings are in controversy regarding levy of GST on sanitizers.
The importers and manufacturers of sanitizers have emphasised on the need to reclassify sanitizers as "Medicaments" reason being that it is used as a protection from Coronavirus. On the other hand, Last month the Union Finance Minister clarified that hand sanitizers are "disinfectants" like soaps, anti-bacterial liquids, etc. which attract 18% GST.
The Government had declared masks and hand sanitizers to be "essential commodities" until June 30, 2020 which enabled them to control and supervise its production, quality and distribution. But Government intimated that it has decided not to continue to classify masks and sanitizers as 'Essential Commodities' in the Office Memorandum dated July 1, 2020.
Recently, The apex court had dismissed a PIL which sought exemption for face masks and hand sanitizers from Goods and Services Tax. The court held that petitioner was not an expert on the issue and cannot determine prices.
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