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Sanitisers not medicament, to face 18% GST: Tax body

Sanitisers not medicament, to face 18% GST: Tax body

(This story originally appeared in on Mar 06, 2021)

The Karnataka bench of the GST Authority for Advance Rulings (AAR) has held in its recent order that hand sanitisers are not a medicament. As a result, these would be subject to a GST levy of 18%.


Enterprises, which manufactures consumer products such as soaps, toiletries and bulbs, began to produce and market hand sanitisers on a large scale in the backdrop of the pandemic. The company is part of the Wipro Group, which is also known for being one of the tech giants in India.

In June last year, it approached the AAR to determine the appropriate classification of hand sanitisers and hence the GST rate. It submitted that the product which contained 95% ethyl alcohol and had obtained a drug licence should be classified under chapter heading 3004. This chapter covers medicaments having a therapeutic or prophylactic value. Referring to various court decisions, it pointed out that hair oil used for killing lice, or iodine cleaning solutions had been regarded as medicaments.

However, the AAR bench observed in its recent order that hand sanitisers cannot be called a therapeutic agent as they do not treat a disease already prevalent in a patient. Second, this product cannot be considered as prophylactic goods either as it is not specific to any disease but is an alternative to soap. Further, it cannot be compared with polio drops or Covaxin. Thus, it is not a medicament and would be subject to 18% GST.

Incidentally in July last year (after the date of filing of the AAR application by Wipro Enterprises), the finance ministry had clarified that sanitisers are disinfectants like soaps, anti-bacterial liquids and Dettol, which all attract duty at the standard rate of 18% under the GST regime. TOI had earlier reported on a ruling by the Goa-bench of the AAR which had also held alcohol-based hand sanitisers manufactured by a local company would be subject to 18% GST levy.

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