CBIC clarifies on GST rate on Hand Sanitizers

Last updated: 15 July 2020

Save Share

Quick Summary

The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification regarding the Goods and Services Tax (GST) rate on alcohol-based hand sanitizers. Media reports suggesting a change in the 18% GST rate have been addressed, with the CBIC explaining that sanitizers are classified as disinfectants, similar to soaps and other cleaning products, all of which attract an 18% GST. The decision to maintain this rate was made by the GST Council, comprising central and state governments. Reducing the rate could create an 'inverted duty structure', disadvantaging domestic manufacturers against importers and contradicting the 'Atmanirbhar Bharat' initiative.

Press Note - Clarification on GST Rate on Hand Sanitizers.

Clarification on issue of GST rate on alcohol based hand sanitizers

The issue of GST rate on alcohol based hand sanitizers has been reported in few sections of media.

It is stated that hand sanitizers attract GST at the rate of 18%. Sanitizers are disinfectants like soaps, anti-bacterial liquids, dettol etc which all attract duty standard rate of 18% 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.

It is further clarified that inputs for manufacture of hand sanitizers are chemicals packing material, input services, which also attract a GST rate of 18%. Reducing the GST rate on sanitizers and other similar items would lead to an inverted duty structure and put the domestic manufacturers at disadvantage vis-a-vis importers. 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.

FAQ :

The current GST rate on alcohol-based hand sanitizers is 18%.

Hand sanitizers are classified as disinfectants, similar to soaps and other cleaning products, which all attract a standard GST rate of 18%.

GST rates on various items are decided by the GST Council, a body where the Central Government and all state governments deliberate and make decisions.

An inverted duty structure occurs when the tax rate on inputs is higher than the tax rate on the final product. In this case, reducing the GST on sanitizers could lead to this, disadvantaging domestic manufacturers.

Maintaining the 18% GST rate supports domestic manufacturing and aligns with the 'Atmanirbhar Bharat' (self-reliant India) policy by preventing imported products from becoming cheaper due to lower GST.

The CBIC suggests that consumers would not ultimately benefit if a lower GST rate leads to domestic manufacturing suffering due to an inverted duty structure.

18735 Views Comment Share GST Report

News posted by

CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

View News

Comments :