Disinfectants are kicked out of the ranks of medicines, and these popular products in India will be subject to an 18% consumption tax

The Karnataka bench of the GST Authority for Advance Rulings ( AAR ) recently ruled that hand sanitisers are not medicines. Hence , the products will be subject to GST of 18% .

Since 2020, the new coronavirus has been raging around the world, and India is one of the countries with the most serious epidemic in the world, and has become the second country with more than 10 million confirmed cases of infection. As of now, the epidemic situation in India remains severe.

Affected by the epidemic, cleaning has become one of the most concerned issues for Indian people since 2020. The popularity of the theme of "cleaning" remains high, and the search volume of multiple related sub-terms on the theme of cleaning has also continued to increase.

As cleaning becomes a top priority, related cleaning products have also become regular players on the best-selling list. These products include personal cleaning and care products such as shampoo, shower gel, soap, laundry detergent, laundry powder and other products that have the function of disinfecting viruses and bacteria, as well as disinfectant products such as alcohol-containing hand sanitizer, disinfectant spray, alcohol wipes, etc.

According to Indian law, disinfectant products, as ordinary commodities, are subject to an 18% goods and services tax (GST). However, shortly after the outbreak of the epidemic, India's Wipro Enterprises ( a cleaning and toiletries company ) contacted the AAR to have disinfectants classified as pharmaceutical products, so that disinfectant products as medicines are no longer subject to the GST.

These products include alcohol-based hand sanitizers, products containing iodine cleaning solutions, and other disinfectant products that have obtained a pharmaceutical license.

Recently, the ARR judge ruled that disinfectant products are not drugs. The ARR judge believes that disinfectant products cannot treat patients' diseases or prevent any diseases. They are just substitutes for soap and therefore cannot be identified as drugs. In the future, disinfectant products will be subject to an 18% consumption tax like other non-drug products.

For sellers, whether disinfectant products are still worth a try remains to be considered. On the one hand, the 18% consumption tax will reduce some of the profits of the products, and the sellers' income will decrease.

On the other hand, the WHO said that it is expected that the global epidemic will still be difficult to end by the end of 2021, and anti-epidemic work will continue. As a severely affected area, India's epidemic situation is in line with the WHO's prediction. Since mid-to-late February, the number of confirmed cases in India has surged, and 240 mutant viruses have emerged. Therefore, disinfectant products will continue the hot sales trend of 2020, with a good momentum.

Relevant sellers can consider the above factors comprehensively and make decisions.

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