18% GST On Alcohol-Based Sanitizers: Authority For Advance Ruling

The Goa-bench of Authority For Advance Ruling (AAR) has ruled that 18% GST will be levied on all the Alcohol-based hand sanitizers.

This confirmation has come after Springfield India Distilleries had approached the authority to seek classification of hand sanitizers supplied by the company, and contended that the product is taxed at 12%.

They also sought to clarify whether the sanitizers as a product would be exempted from Goods and Services Tax, as the Consumer Affairs Ministry had classified them as an essential commodity.

The AAR said that since hand sanitizers manufactured by the applicant are of the category of 'alcohol-based hand sanitizers', and are classifiable under heading 3808 of Harmonized System Nomenclature (HSN), hence, a GST of 18% would be applicable.

The constituted body further said that though the hand sanitizers are classified as essential commodities by the Ministry of Consumer Affairs, the GST law has a separate list of exempted goods.

Worldwide, health experts have recommended the use of hand sanitizers that contain at least 60% alcohol content, to inactivate the virus causing COVID-19 and as a general proven disinfectant.

EY Tax Partner Abhishek Jain said that the classification of hand sanitizers has been a matter of debate for a long time, given the multiple entries which it could warrant classification to, because of its composition and uses, news agency PTI reported.

"Given its grave importance at this time of pandemic, and multiple companies now manufacturing it, the government should focus on issuing an explicit clarification to control unwarranted litigation on this aspect," Jain as quoted

Also Read: Bengal Bureaucrat Supervising Migrant Movements Amid Lockdown Succumbs To COVID-19