GST-exempt Sanitary Napkins: "No Price Reduction Due to Refusal of the Input Tax Credit"

The badociation asked the government to find a solution for granting input tax credit to manufacturers. Manufacturers of products exempted under the GST are not eligible for the input tax credit. (Source: Dreamstime.com)

The Association for Women's and Infant Hygiene (FIHA) is preparing to approach the government against the recent GST Board's decision to exempt sanitary napkins, invoking an unfair competitive advantage for importers and the possibility of turning the badociation, which represents the baby manufacturing, clinical layer and sanitary napkin industries, has companies such as Johnson & Johnson, P & G, Dima Products, Kimberly Clark, Soothe Healthcare, Unicharm, Saral Designs, Shekhani Industry, Hygiene MD, Kamal Healthcare, RGI Meditech, Bella Premier, Rohit Surfactant, Women & Infant Health, Nobel Hygiene as its members, l & # 39; badociation said:

"While it was well-intentioned, it is unlikely that the decision will achieve the purpose for which it was designed – making this category more affordable for consumers The exemption of the finished product from the sanitary napkins of the GST effectively denies the input tax credit to manufacturing companies in India, therefore, in order to compensate the loss, the companies will not be able to transmit a significant benefit to consumers "

The badociation expressed concern that" this decision offers an unfair competitive advantage to importers, which is contrary to the spirit of equal opportunity ". "It will also make it unprofitable and difficult to continue to provide government contracts at existing rates," he said.

The badociation asked the government to find a solution to provide an input tax credit to manufacturers. Manufacturers of products exempted under the GST are not eligible for the input tax credit.

On Saturday, the GST Board at its 28th meeting lowered tariffs for about 88 items, including the exemption of widely requested sanitary napkins. hundred. The rate cuts would come into effect from Friday, July 27.

In July 2017, the government defended the decision not to lower the 12 per cent GST rate on sanitary napkins by citing high input rates of 18 and 12 per cent. The government's publication also stated that "zeroing the GST rate on sanitary napkins … would result in ITC's complete denial to domestic manufacturers of sanitary napkins and zero-rate imports." This will make domestically produced sanitary towels extremely disadvantaged compared to imports, which will be zero-rated. "

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