Who will benefit from the tax cut on sanitary napkins?

Fredrick Soto
July 23, 2018

After a nine-hour meeting of the GST Council, chaired by acting finance minister Piyush Goyal, the government on Saturday chose to exempt GST on sanitary napkins; deities made of stone, marble or wood; Raakhis without precious metals; raw materials used in brooms; commemorative coins; fortified milk; and the premium paid under the Ayushman Bharat Scheme. Interestingly the sugar cess also came up during the discussion and reportedly a report was submitted for the same.

Experts believe that while prices may fall due to the rate cut, the reduction may not be significant the input tax credit issue may result in manufacturers increasing the overall price of the product.

The GST Council was chaired by Piyush Goyal, the minister of railways, who is also handling the charge of finance ministry at the present due to the absence of finance minister Arun Jaitley, who recently went through a kidney transplant surgery.

#BleedWithoutTax started by the Students' Federation of India, the student wing of the Communist Party of India (Marxist), sent sanitary napkins with the slogan "bleed without fear, bleed without tax" to Jaitley in July past year, while Youth ki Awaaz started their own hashtag #IAmNotDown to protest the taxation of sanitary napkins.

According to a 2011 study by AC Nielsen, only 12 per cent of India's 335 million adult women can afford sanitary pads. He said, GST on imported urea and ethanol sold to oil companies for blending with petrol and diesel has been reduced to 5 per cent. This could benefit 93 per cent of tax payers. There had been a widespread demand for making sanitary napkins tax-free.

A national survey report released earlier this year said around 60 per cent of young women aged between 16 and 24 years did not have access to sanitary pads.

The next GST Council meeting will be held on August 4. "Rakhis have been exempted from the GST, the tax on ethanol has been cut to 5 per cent, small handicraft items have been exempted", Goyal said.

Apart from the change in taxes on commodities, Piyush Goyal announced a number of measures to simplify tax filing. "Why can not sanitary napkins, which is an essential item, be exempted?" the court had asked. He said, the decisions taken today will be applicable from 27th of this month.

Depending on brand, a pack of 10 ultra napkins may cost Rs 70-90.

After a year-long campaign, the GST on sanitary napkins has finally been abolished.

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