The Chhattisgarh Bench of the Authority of Advance Ruling ( AAR ) has recently ruled that commercial production of hand sanitizers are taxable at 18% Goods and Services Tax ( GST ).
M/s Popular Paints & Chemicals, filed an application seeking a ruling on Appropriate HSN Code applicable on commercial production of hand rub solution traditionally called hand sanitizer and
the Appropriate GST Rate applicable commercial production of hand rub solution traditionally called hand sanitizer.
The applicant submitted their view that their item falls under Chapter Head 30, HSN Code 30049087 with leviable GST at CGST 6% + SGST 6% or 12% IGST, the product name being Hand Sanitizer.
It was further contended by the applicant that the above product should be covered under Chapter Head 30, HSN Code 30049087 for “anti-bacterial formulations not elsewhere specified or included”.
M.R. Dewangan, C.A. appeared before the authority for hearing and furnished a written submission dated.
From Notification 1/2017- Central Tax (Rate) , dated 28 June 2017, the authority bench of Members Sonal K Mishra and Rajesh Kumar Singh observed that the product of the manufacturers fall under Entry No. 87 of Schedule III, and attracts 18% Goods and Services Tax (GST) under the head “disinfectants and similar products” and not under Entry No. 63 of Schedule II, taxable at 12% GST under the head “medicaments”.
It was also clarified that the appropriate HSN code applicable on the commercial production of hand rub solution, traditionally called hand sanitizer is 3808 of Tariff and thus ruled that, the appropriate GST rate applicable, on the commercial production of the same by the applicants, is 18% (9% Central Goods and Services Tax – CGST and 9% State Goods and Services Tax – SGST).
It was also noted that the consumers would also not benefit from the lower GST rate if domestic manufacturing suffers on account of the inverted duty structure.
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