NEW DELHI: The government has clarified its decision to levy 5% goods and services tax on assistive devices for the physically challenged, rejecting Congress vice-president Rahul Gandhi’s allegation that the government has been “insensitive” to the disabled. 

“Tax incidence is not going up but going down,” revenue secretary Hasmukh Adhia said, even as he offered two reasons why these devices have not been exempted from GST. 

Under GST, Braille writers and Braille paper to wheelchairs, talking books, assistive listening devices and implants for the severely physically challenged will be levied 5% tax. This will allow the manufacturers to claim input tax levied on raw material used, most of which is in the 18% tax category. 

Effectively, the entire 5% levy will be offset against the input taxes, leading to zero effective tax. Moreover, if the input taxes exceed the final tax, the manufacturer will even be able to claim refund of any input tax left over. 

This would mean that domestically manufactured devices and equipment would bear the burden of input taxes, increasing their cost and becoming uncompetitive to imports,” the statement said. 

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