New Delhi, July 4
The central government on Tuesday refuted Congress leader Rahul Gandhi's charge of GST rates being "insensitive" to the disabled, saying a discounted 5 per cent levy will bring down prices of assistive devices for physically-challenged and promote domestic manufacturing.
From Braille writers and Braille paper to wheelchairs, talking books, Assistive Listening Devices (ALD) and implants for the severely physically-challenged, as many as 22 items for them will attract a Goods and Services Tax (GST) of 5 per cent.
The rate was kept at 5 per cent because the inputs and raw material like steel used for manufacturing these assistive devices or equipment attract 18 per cent GST.
Since the final consumer tax is lower than the tax on inputs, a domestic manufacturer can claim refund, Revenue Secretary Hasmukh Adhia said adding if the GST tax rate was zero it would have meant that domestically manufactured equipment would have been uncompetitive as compared to imports.
"There are 22 items where the GST Council has decided to keep tax in 5 per cent bracket. The reason for this is not to do disservice to them — it is to help them that we have kept it at 5 per cent. Under GST, the first principle is there should not be any cascading of taxation," he told a media briefing.
If the tax rate was kept at zero, no refund to domestic manufacturer would have been available for the 18 per cent tax on inputs and raw material he used and so the goods would have been loaded with that cost as compared to current 5 per cent, he said.
"By keeping it in a very reasonable rate of 5 per cent manufacturer will be able to pay 5 per cent out of input tax credit and the remaining amount will be refunded back to him.
So the price of this commodity should come down because of this," he said.
At zero per cent tax rate, import of wheel chair and other equipment would have come in duty free and domestic production could have stopped completely, he said.
"I think it is reasonable and the tax incidence is not going up, but going down because of this," he said.
Gandhi had accused the Modi government of being "insensitive" by imposing "disability tax" of 5-18 per cent on wheelchairs and Braille typewriters, and demanded its full rollback on Monday.
"GST on disability aids like wheelchairs and Braille typewriters once again shows this government's complete insensitivity towards our most vulnerable. Congress Party demands a full rollback of this 'disability tax' that will put millions of our disabled people through further hardship," he had said in a Twitter post.
Earlier in the day, an official statement had stated that if these devices or equipment were exempted from GST, imports would continue to be at zero per cent duty.
This would mean that domestically manufactured devices and equipment would bear the burden of input taxes, increasing their cost and becoming uncompetitive to imports.
"In fact, the 5 per cent concessional (sic) GST rate on such devices and equipment will result in a win-win situation for both the users of such devices, the disabled persons, as well as the domestic manufacturers of such goods.”
"It is for this reason that the Council has kept these items in 5 per cent rate slab," the statement said.
The government statement went on to list the items that would be given the concession: — handwriting equipment like Braille frames, slates, writing guides, script writing guides, styli and Braille Erasers. External catheters, special jelly cushions to prevent bed sores, stair lift, urine collection bags and instruments and implants for severely physically challenged patients and joint replacement, spinal instruments and implants, including bone cement, are taxed at the lowest slab. Specially-adapted clocks and watches, orthopaedic appliances, electronic measuring equipment such as callipers, micrometres, comparators, gauges, rulers and yardsticks are also taxed in the lowest range.
Also, tangible appliances including articles, instruments, apparatus, specially designed for use by the blind, ALD, audiometers, technical aids for education, rehabilitation, vocational training and employment of the blind such as Braille typewriters, Braille watches, teaching and learning aids, games and other instruments are taxed at 5 per cent.
A four-tier GST — 5, 12, 18 and 28 per cent — was implemented from July 1.
Source: http://www.tribuneindia.com/news/nation/devices-for-disabled-taxed-at-discounted-5-rate-govt/431643.html