written by Khatabook | November 15, 2021

GST on PPE in India: GST on Face Masks, Sanitisers and Handwash

Before 2017, there was a system of multiple taxes. It was applicable for products such as hand sanitisers, gloves, masks, etc. The Goods and Services Tax (GST) was introduced to avoid the cascading of taxes. The rates under the value-added system for masks, hand sanitisers are different from state to state. Under GST compliances, the GST  on PPE kit, face masks, and GST on hand wash and sanitisers is the same across the country. There is only a single tax in the GST system that means all the other taxes are subsumed here. Therefore, with the introduction of GST, the prices of personal protective equipment or PPE products have been simplified. 

The Goods and Services Tax (GST) is a single tax that applies to the supply of goods and services from the manufacturer to the final consumer. It aims to decrease manufacturing costs and create a more uniform and simplified economy with more evenly priced goods and services. If you are not sure about the GST rate on PPE products like sanitisers or masks, after reading this article, you will better understand the GST rate on PPE and the impact of GST on PPE.

What are the various GST rates on goods and services?

  • As per the Central Goods and Services Tax (CGST) ACT, 2017, the goods and services tax rates are 28%, 18%, 12%, and 5%, which are levied on the goods and services.  
  • If the place of buyer and seller at the time of supply is the same, then it is known as intrastate supply, and the tax is levied as state tax and central tax, respectively. 
  • On the other hand, if the place of buyer and seller at the time of supply is different, it is known as interstate supply. 
  • To calculate the value of supply, it is essential to know about the place of supply. The supplier has to check if the transaction is interstate or intrastate. 
  • It is to be noted which of the three taxes need to be collected. There are three kinds of taxes in GST that are:
  • Central Goods and Services Tax (CGST),
  • State Goods and Services Tax (SGST),
  • Interstate Goods and Services Tax (IGST).

Also Read: Types of GST in India - What is CGST, SGST and IGST?

With an outbreak of the COVID-19 pandemic across the globe, demand for medical supplies like sanitisers, disposable face masks, PPE and Test Kits has increased drastically. Therefore, knowing the GST Rates, HSN Code, ITC availability, exemption details and manufacturing aspects are helpful.

Impact of GST on PPE kit and Face Masks

Taxed Interchange Offers:  All suppliers follow the GST implementation rate of  PPE Products at an 18% taxation rate; many known PPE makers began some new offers that allow users to buy the complete package of PPE at a discounted price.

Some of the benefits of the GST on hand gloves and sanitisers are as follows:

In 2020, the demand for face masks, hand gloves, and sanitisers considerably rose. These products are essential for maintaining social distance and good hygiene.

1. Unified national market 

GST has made India a unified national market with standard tax rates and procedures. It broke the barriers that were present due to the diversity of taxes.

2. Competitive edge

With the introduction of GST in India, the cost of goods and services has decreased. It gave an advantage to the country by making the goods and services competitive at the International level.

3. No cascading effect of taxes

Cascading of taxes happens when a tax is imposed on every stage of production. This practice ultimately increases the price of goods that leads to inflation. With the GST implementation, suppliers can take credit or ITC on the taxes paid to the government. This has resulted in reducing the negative impact of the previous tax structure.

Benefits of the GST for Manufacturers of mask and sanitiser

The following are some of the advantages of GST on manufacturers of mask and sanitiser:

  • Based on the VAT principle, GST will be imposed solely at the final point of consumption, not at numerous locations. This will assist in the removal of economic inequalities and the creation of a single national market.
  • According to research, the adoption of GST will lower the cost of goods and services in the long run.
  • The fact that most former non-creditable taxes on interstate supplies are now creditable is crucial in driving down manufacturing costs such as entry tax, central sales tax, etc.
  • Set-offs would now be possible, easing the load on the manufacturing sector and ensuring a consistent flow of credit. Because most taxes have been subsumed under the GST system, other trading channel players, such as retailers and distributors, will now be able to claim credit for the taxes they have paid.
  • With the weight of indirect tax on manufacturers reduced, the furniture manufacturing industry will focus more on the quality element of the manufacturing process rather than just the marketing, filling quality gaps in a country that desperately needs to upgrade its goods.
  • Discounts are shown separately on the respective bills.

The GST rates for some PPE products have been listed below : 

PPE products

GST rates

Cotton face masks rate

5%

Diagnostic test kits

5%

Ventilators

12%

Face masks other than cotton

12%

Protective spectacles

12%

Dettol hand wash GST rate

18%

Alcohol-based hand sanitiser

18%

Gloves 

18%

Waste disposal bin

18%

Disinfectants

18%

Face shield

18%

Tissue paper and napkins

18%

Temperature check equipment

18%

PPE Kits made of Non-Woven Textiles:

PPE products

GST rate

HSN Code

PPE Kits made of Non-Woven Textile when the sale value is upto to Rs.1,000

5%

6210/6307

PPE Kits made of Non-Woven Textile when the sale value exceeds Rs.1,000

12%

6210/6307

Due to the COVID-19 situation, the Central Government has given some exemptions like basic customs duty and health cess on importing PPE, hand sanitisers and face masks.

PPE products

GST rate

HSN Code

Hand sanitisers and other disinfectants

18%

Sanitisers HSN code: 3808

Rubber gloves

18%

Rubber gloves HSN code: 4015

If there is a case when credit is used explicitly by the employees, workers, and staff, the input tax credit would be permitted based on health services.

HSN codes for some PPE products have been listed below :

PPE Products

HSN Codes

Cotton face masks

5208

Face masks other than cotton

9020

Hand wash products

3401

Alcohol-based hand sanitiser

3808

Gloves HSN code

4015

Disinfectants 

3402

Tissue paper and napkins

4818

Face shields

3926

Waste disposal bins

3923

Protective spectacles

9004

Diagnostic test kits

3002

Temperature check equipment

9025

Ventilators 

9019

The rate of GST on face masks and hand sanitisers was raised at the GST council meeting. The GST rate on PPE products in India varies between 5% and 18%, depending on the product type. The HSN number series lies between 3000 to 9000 depending upon their categories. As a result, face masks, hand sanitisers prices have increased.

  • Gas Masks with the feature of Replaceable Filter and mechanical Parts attract GST at the rate of 12%, and its HSN Code is 9020
  • Mask (Fabric) without Replaceable filter and mechanical parts, including surgical Masks made of Non-Woven textiles, attract GST at the rate of 5%, and its HSN Code is 6307.

The import duty on masks for importers is zero, but those who manufacture these products in India will have to pay GST at rates ranging from 5 to 12 per cent.

Positive impact of the present GST regime

With the advent of GST, there will only be one rate to write. Because taxes on products and services are stated separately for one transaction, invoices are now more thorough. Therefore, some benefits of implementing GST are:

  • GST aids in the development of a transparent and anti-corruption tax administration.
  • Previously, the majority of supply chain management was based on state-by-state taxes. Businesses are now compelled to re-engineer their supply chains under the GST’s “one-nation-one tax” idea, which will drive them to focus on improving company efficiency and operability instead.
  • GST is supported by the Goods and Services Tax Network (GSTN), a fully integrated tax infrastructure that handles all tax aspects.
  • If a single furniture manufacturer operated many facilities in the same state, each factory had to be registered separately. 
  • Under the GST system, a single taxable producer would only need to file for a single registration, regardless of the number of factories in the state. This implies that there will be less paperwork and bureaucratic interference at each stage.

Also Read: History of GST in India - Benefits of GST Implementation

Impact of elimination of entry tax

  • The elimination of the entry tax will help transit goods such as furniture by road within due time.
  • Manufacturing companies with a turnover of fewer than INR 75 lakhs can now take advantage of the GST Composition Scheme at a rate of 2%
  • Tax exclusions from the GST of hand gloves and PPE are due to the various exclusions granted by the Centre and the states; the final price in each state varies. Exemptions would be similar between the Centre and the states under the GST framework, ensuring that duty rates are uniform.
  • Earlier, different tax assessment authorities were responsible for different taxes, such as VAT, sales tax, service tax, Central Excise, etc. This not only made the process confusing, but it was also incredibly time demanding, leaving manufacturers dealing with tax questions they didn’t understand, negatively impacting their business.
  • In the current times, the elimination of entry tax has helped in reducing the expenditure rate of necessary items or raw materials. This has aided in the process of developing goods such as PPE products at lower costs.

Conclusion

In comparison to VAT, the implementation of GST has simplified the taxes structure in several sectors of the economy. The government has made attempts to ensure that the transition to GST is as smooth as possible. It will help cut inventory costs in the long run, which will reap benefits for the economy. This has positively impacted GST on hand sanitisers, PPE kits, face masks, among other healthcare items. 

We hope this post has helped you comprehend GSTR Rates and HSN Codes for sanitisers and other products. The Khatabook app can be a game-changer doing everything from maintaining all your accounts, assisting with GST compliance and more. All from a few clicks on your mobile phone. It is specially designed for growing businesses looking for an all-in-one business solution. Try it today!

FAQs

Q: How is GST calculated?

Ans:

GST is determined in India as the sum of GST payable on a chargeable basis, inbound and outbound goods and services. This total is determined separately for each month, and you must pay the amount computed while filing your GST returns every month.

Q: When should one file a GST return?

Ans:

A GST return or GSTR is a record that taxpayers must file within the due date.  The record contains information about income, purchases, and expenses, and it has proven effective in calculating an individual’s tax burden.

Q: How to calculate GST on hand sanitisers and face masks?

Ans:

According to the GST laws, the GST rate on PPE products in India is the same across the country. The GST rate on hand gloves is 18%, and the HSN code ranges between 3000 to 9000. The GST rate on face masks other than cotton is 12%, and the HSN code ranges between 9020.

Q: What are the increased GST rates on hand sanitisers and gloves?

Ans:

After the GST Council fixed the industry’s inverted duty structure, the hand gloves rate is subject to an 18 % GST (Goods and Services Tax) rate beginning April 1, 2020, up from the previous 12%.

Q: What is the GST for PPE products?

Ans:

GST on PPE kit is 18%.

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