Even after more than a year since the Goods and Services Tax (GST) came into being, people are still reeling under its effect. Pushed as a government’s promise to the common public that day-to-day products will attract zero tax has fallen short of accomplishment as taxes have been imposed on goods for differently-abled people.
On one hand, the government tries to show that it is strongly committed for the empowerment of persons with disabilities (PWD), but on the other, imposes a GST of 5% on products like wheelchair. Another major problem is with imposing GST on parts and accessories of products like specialised wheelchair cushions, which although is a necessity for people with disabilities, have been categorised as a luxury item meaning that it attracts a GST of 28%.
Luxury GST rate on parts and accessories
All the products, as per international standards are listed under the Harmonised System of Nomenclature (HSN). This classifies products in categories and subcategories. So, usually, when a tax is imposed, it is assigned to the product which is highest in the hierarchy, meaning all the products in the subcategories will reflect the same rate of tax. Unfortunately, products for the disabled are not listed under separate category which has mobility aids for disabled people. To give an idea of how this is extremely unjust for PwD is that, products like powerised wheelchair comes under the same category as motor vehicle, that is, 28%. It is to be noted that in countries like UK, Canada and Australia disabled people do not pay taxes as they enjoy an end-user exemption.
Before GST, all products for the disabled persons were listed under ‘List 32’ and no tax, whatsoever, was imposed on them. ‘List 32’ is a list of all the types of equipment that PwDs use. Now, the situation is that not only is GST being imposed on these products, there are widespread confusion and ambiguity around the GST amount attracted by these products, their parts and accessories. Prashant Singh, from Specialized Mobility Operations & Innovations, told The Logical Indian “We are one of the very few manufacturers of customised products for disabled persons. Pre-GST, all wheelchair and accessories/parts imports were excluded from any taxation and customs duty. Post GST implementation, the entire wheelchair industry is facing a tremendous amount of confusion and uncertainty with respect to taxation being levied upon wheelchair parts and accessories.”
Mr Singh further explains that products like wheelchairs have been classified under two different GST rates. One is the HSN code ’90 or any other chapter’ which by definition ‘Parts of goods, namely crutches, wheelchairs, walking frames, tricycles, braillers and artificial limbs’ attracts 5% IGST. And the other is HSN Code Heading 8714 by definition ‘parts and accessories of vehicles of heading 8711 and 8713 ‘ which attracts 28% IGST. HSN code 8713 also, by definition contains ‘Carriages for disabled persons, whether or not motorised or otherwise mechanically propelled ‘ is applied to all wheelchair imports which attracts 5% IGST.
“Our concern is which HS Code would be applicable to wheelchair parts such as wheels, brakes, frames etc.? We manufacturers are constantly on the receiving end when importing these items as the Customs Department levies variable GST rates and sometimes even duty which negatively impacts business operations,” says Mr Singh.
“Govt has completely ignored disabled persons”
When The Logical Indian spoke to Vaishnavi Jayakumar from the Disability Rights Alliance (DRA), she said, “While earlier there was zero tax on the products like wheelchair etc., after the GST came into effect, they are being taxed at 5%. Infact, earlier the GST was fixed between 5%-18% on aids needed by the differently-abled to sustain everyday life, it was only after a lot of hullabaloo that it was reduced to 5%.”
Vaishnavi says that when there was a huge campaign for complete roll back of GST on the products and aids. Finance Minister Arun Jaitley had said that this was the best GST rate fixed for the disabled persons as they would now be getting the input tax credit. Input credit means that at the time of paying tax on output, you can reduce the tax you have already paid on inputs.
“We met with the Finance Minister and produced two bills for a wheelchair. One was that of before GST and the other was of three months later, which was the price with GST. And the amount in the latter was higher. However, Mr Arun Jaitley then refused to believe it and said that ‘it could no way be possible’,” says Vaishnavi.
Vaishnavi raises a very poignant point, “Everybody believes that the income tax they pay is what runs the whole infrastructure the government builds. However, in reality, it is the indirect taxes like that of GST which plays a huge role in this. So when a disabled person pays these tax, the government rewards him/her by building infrastructure like the metro, which is not at all accessible to disabled people.”
“We are actually demanding for 0% GST on aids needed by disabled persons. But at least for now we want all the products with their parts and accessories to have an uniform GST of 5%. Government should not profit from the way we are,” she says.
“These are not luxury items for us, these are necessities”
Mr JD Madan suffers from a spinal cord injury. In cases of spinal cord injuries, depending on the level of injury, the body that is completely paralysed. It is the most severe form of locomotor disability. “We spend our whole day on a wheelchair. So with the wheelchair, we need customised cushions. In absence of which, we may develop pressure sores or pressure ulcers,” he says.
When a person develops a pressure ulcer, he/she can no more sit on the wheelchair and has to lie on the bed all the time. To recover from this it takes anywhere between four weeks to even 12 weeks. “Not moving around may lead to even urinary infections, which may further lead to fever and cold. It is a really bad cycle. You would need a lot of time and a lot of help from others to recover. This may also lead to depression in some people. So, the thing is that items like cushions are definitely not a luxury item, it’s a necessity. If we didn’t have to use it, we would have not used it at all,” says Madan.
The Logical Indian take
It is highly unjust that the government is imposing high tax rates on aids required by disabled persons. These products and parts are an extreme necessity, akin to a body part. It wouldn’t be wrong to say that imposing GST on these is the same as imposing GST on body parts. How unfair is that? The GST council meet is to be held on August 4. The Logical Indian hopes that the council strictly considers the proposals made by the individuals with disability and the manufacturers of such products.