In the past, there was a multi-tax system in place. It was a rule that applied to products such as hand sanitisers, gloves, masks, etc. A Goods and Services Tax (GST) has been implemented in order to prevent the cascading of taxes.
Introduction
GST refers to a single tax that applies from the manufacturer to the end-user on the supply of goods and services. Therefore, production costs will be reduced, resulting in a more uniform and more efficient economy with goods and services priced more evenly will be created. After reading this article, you will likely be more informed of the GST rate on personal protective equipment, such as sanitisers and masks.
What are the Various GST Rates for Goods and Services?
- As per the Central Goods and Services Tax (CGST) Act, 2017, the rate of goods and services tax is 28%, 18%, 12%, and 5%
- The tax is imposed as both a state tax and a central tax when the seller and buyer are within the same state at the time of supply
- In contrast, an interstate supply occurs between two parties who are located at different places at the time of supply
- In order to determine the value of the supply, it is essential to identify the location of the supply. No matter whether the exchange is interstate or intrastate, it is the accountability of the supplier
- It is essential to note the type of tax that is required to be collected. GST has a total of three types of taxes:
- CGST (Central Goods and Services Tax)
- SGST stands for State Goods and Services Tax
- IGST stands for Interstate Goods and Services Tax
Due to the escalation of the COVID-19 pandemic across the globe, the demand for medical supplies like sanitisers, disposable face masks, personal protective equipment (PPE) and test kits has skyrocketed dramatically over the past few months. Thus, it is essential to understand GST rates, HSN codes, ITC status, exempt details, and manufacturing aspects in order to make informed decisions.
Listing of Some Personal Protective Items that are Taxable to GST
| PPE products | GST rates |
| Face masks made of cotton | 5% |
| Kits for diagnostic testing | 5% |
| Air ventilators | 12% |
| Other than cotton face masks | 12% |
| Wearing protective spectacles | 12% |
| GST rate for Dettol hand wash | 18% |
| An alcohol-based hand sanitiser | 18% |
| Hand gloves | 18% |
| Bins for disposal of waste | 18% |
| The disinfectants | 18% |
| Shield for the face | 18% |
| Paper napkins and tissue | 18% |
| Equipment for checking the temperature | 18% |
NON-WOVEN TEXTILE PPE KITS:
| PPE products | GST rate | HSN Code |
| If the sale value of the PPE kit is up to Rs.1,000, the kit will be made of non-woven textiles. | 5% | 6210/6307 |
| If the sale value exceeds Rs.1,000, PPE kits made of non-woven textile are eligible | 12% | 6210/6307 |
A few exemptions have been made available to manufacturers of personal protective equipment, antiseptics, and face masks due to the COVID-19 situation.
| PPE products | GST rate | HSN Code |
| Disinfectants and hand sanitizers | 18% | Sanitisers HSN code: 3808 |
| Gloves made of rubber | 18% | Rubber gloves HSN code: 4015 |
If the employee, worker, or staff uses the credit amount explicitly to purchase a product or service, then they may qualify for an input tax credit.
Make tax management a breeze! Try our GST Calculator Online for quick and error-free calculations.
GST’s Impact on PPE Kits and Face Masks
It is important to understand that exchange offers are taxed. All vendors follow the GST implementation rate of 18% for PPE products. There have been many providers of safety equipment launching new products that allow users to buy complete packages of personal protective equipment at discounted prices. And GST Rates for PPE
As a direct consequence of the GST on hand gloves and sanitizers, several benefits will be realized:
Face masks, hand gloves, and sanitizers were in high demand in 2020. In order to maintain social distance as well as to ensure proper hygiene, it is imperative to use products such as these.
1. Unified national market
As a result of GST, India has evolved into a unified national tax system with standard tax rates and procedures. As a result of the diversity of taxes, barriers no longer existed.
2. A competitive advantage
The enactment of GST in India has contributed to a reduction in prices for goods and services. As a result, the country was more competitive at the international level in terms of its goods and services.
3. Taxes do not cascade
The cascading of taxes occurs when a new tax is imposed at every stage of the production process. It can be argued that this practice results in goods being priced higher at the end of the day, resulting in inflation as a result. As a result of the implementation of GST, suppliers will be able to claim an input tax credit or ITC on their tax payments to the governmental entity as a result of the GST. It has been proven that these changes have reduced the adverse effects of the former tax system as a result of these changes.
GST Benefits Mask and Sanitizer Manufacturers
GST offer the following advantages to manufacturers of masks and sanitisers:
- Taking into factor the VAT principle, GST registration will be charged only at the place of consumption and not at numerous locations throughout the country. As a result, inequalities in the economy will be minimised, and a single national marketplace will be created.
- Seek professional assistance to navigate complexities during the apply for GST number process.
- Research has shown that the introduction of GST will lower the price of goods and services.
- A majority of the taxes that were previously not creditable on interstate supplies have now become creditable, which has a significant impact on the cost of production, including entry taxes, sales taxes, etc.
- This would enable set-offs to be made, reducing the burden on manufacturers and providing a consistent flow of credit. In light of the fact that most taxes have been incorporated under the GST system, other participants in the supply chain, for instance, as retailers and resellers, will now be entitled to tax credits.
- Because of the reduction of indirect taxes on manufacturers, furniture manufacturers will be able to concentrate on quality aspects of the manufacturing process rather than merely marketing because they will be able to focus more on the production process rather than just marketing. As a result, a country that urgently needs to improve the quality of its products will be able to fill gaps in quality by using this method of improving quality.
- Each invoice includes a separate list of discounts that have been applied.
Conclusion
For personal protective equipment, such as first aid kits, masks, hand wash and sanitisers, which are purchased and used throughout the country, there is a GST reporting requirement. As there is only one tax in the country, all other taxes have been incorporated into the GST system due to the fact that there is only one tax. Due to the introduction of GST, the process of calculating the cost of personal protective equipment (PPE) has been simplified as a result of it
