Hand sanitisers are classified as an essential commodity, but GST law has a separate list of exempted goods.
The government has announced that sanitizers are disinfectants like soaps, anti-bacterial liquids, dettol, among others, which attract 18% duty under the GST regime. The Finance Ministry said various chemicals, packing materials and input services, among others, used for manufacturing hand sanitizers also attract a GST rate of 18%.
Reducing the GST rate on sanitizers and other similar items will lead to an inverted duty structure and put domestic manufacturers at a disadvantage vis-a-vis importers of hand sanitizers, the ministry said. Lowering GST rates would make importing sanitizers cheaper as domestic industry would be at a disadvantage if raw materials are taxed at a higher rate than the end product.
