advertisement
The tax on sanitary napkins under the Goods and Services Tax (GST) is the "same or less" than the previous indirect tax regime, the government clarified the following protests in several parts of the country and on social media.
Under the GST, sanitary pads are being taxed at 12 percent compared to 13.68 percent earlier, the Ministry of Finance said in a media statement. The government argued that the raw material used for manufacturing sanitary napkins attract between 12 to 18 percent GST, which would mean that manufacturers will pay more tax than they collect from customers.
Taxation of sanitary napkins at 12 percent has become a contentious issue as a 5 percent rate was "widely expected", MS Mani, partner at tax advisory firm Deloitte India told BloombergQuint.
Activists and legislators have been protesting the 12 percent tax rate on sanitary napkins before GST came into effect on 1 July. Shalini Thackeray, general secretary of the Maharashtra Navnirman Sena urged state finance minister Sudhir Mungantiwar and union finance minister Arun Jaitley to lower the tax incidence on sanitary napkins.
Another parliamentarian Sushmita Dev started a movement on the petition website change.org which has since garnered 3 lakh supporters. "Women are being taxed 12 months a year, for about 39 years on a process they have no control over", read the petition.
"A slab system would have ensured that products used by less affluent sections would be taxed at 5 percent and those used by others are taxed at 12 percent", he said in an emailed statement.
Such a system has already been put in place in the case of footwear and hotels and the same principles could have applied to sanitary napkins, he added. The government, in its clarification, said that keeping sanitary pads in the 5 percent bracket would have resulted in higher accumulated input tax credit and put domestic manufacturers at a disadvantage compared to imports which are zero-rated.
Multiple tax slabs could have helped both the finance and the health ministries achieve their objective, Mani added.
(This piece was originally published on BloombergQuint and has been republished with permission.)
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)