Sanitisers will attract higher 18% GST

New Delhi: Amid the ongoing debate over goods and services tax (GST) rate on hand sanitisers, the government on Wednesday clarified alcohol-based hand sanitisers will continue to be levied at the standard rate of 18 per cent as the product is a disinfectant like soaps and not a medicament.

With the Consumer Affairs Ministry having classified hand sanitisers as essential commodities in wake of Covid-19 pandemic, there had been a demand from certain sections of the industry, particularly liquor and sugar sectors, to classify sanitisers in the medicament category attracting lower 12 per cent duty.

"It is stated that hand sanitisers attract GST at the rate of 18 per cent. Sanitisers are disinfectants like soaps, anti-bacterial liquids, Dettol etc, all of which attract duty at the standard rate of 18 per cent under the GST regime," a Finance Ministry statement said.

"It is further clarified that inputs for manufacture of hand sanitisers are chemicals, packing material, input services, which also attracts 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," the statement added.