Rights

Activists Slam 5% GST on Devices for Persons With Disabilities

Disability rights activists have also accused the GST Council of issuing misleading clarification on taxes.

Credit: Binomialphoto/Flickr (CC BY-NC-ND 2.0)

Credit: Binomialphoto/Flickr (CC BY-NC-ND 2.0)

New Delhi: The GST Council’s claim that the imposition of 5% goods and services tax (GST) on aids and appliances used by persons with disability is a ‘win-win’ situation for all has been termed “spurious” by disability rights activists.

Holding that this claim was “both incorrect and misleading”, as many as 34 individuals and organisations have stated that “pre-GST, barring cars for ‘physically handicapped’, all the disability aids and appliances did not attract any levy.”

Government’s priorities laid bare

Questioning the rationale behind the council imposing the 5% tax when several other items remained exempted, the group said: “While these items [that are essential for persons with disabilities, without which their mobility, education, employment and exercise of their rights and duties is curtailed], attract a GST of 5%, surprisingly, many items used for puja are completely exempt. Also exempt are items like kumkum, bindi, bangles etc.”

Further it noted that unpolished diamonds attract a GST of a mere 0.25% and polished diamonds and gold only 3%, whereas diapers used by certain categories of disabled and elderly have been brought in the 12% tax bracket. “This lays bare the priorities of the government,” it concluded.

Tax would have been higher but for intervention of Kerala, Tripura 

The activists said the situation could have been worse but for intervention of the finance ministers of Kerala and Tripura, which incidentally are both Left ruled. “While the proposed rates for these essential items were in the range of 5-18%, it was subsequent to the raising of this issue by the finance ministers of Kerala and Tripura that the rates were brought down to 5% at the June 11 meeting of the GST Council,” they elaborated.

Despite the uproar over bringing instruments and equipment needed by persons with disabilities under the tax regime, the group regretted that “no revision in rates or clarification was made” and it was only in response to a tweet by Congress vice president Rahul Gandhi that the government was forced to issue a clarification on July 4.

Council clarification missed several points, misguided on others

In this clarification, the council took the plea that the compelling reason for imposing the “concessional rate” of 5% is for the domestic manufacturer to claim input tax credit for raw material used in the manufacture of these products.

Responding to this, the group said it needs to be clarified that items like Braille printer, refreshable Braille display and Braille note-taker, talking watches and clocks, audio labelling devices, DAISY players, talking thermometer, talking weighing machine, talking scales, etc. are entirely imported items and did not attract any taxes earlier.

As for taxes on domestically manufactured items, raw materials like aluminium extrusions, square tubes and round tubes of aluminium used in the manufacture of artificial limbs or many rehabilitation aids, it said they were earlier exempt from the tax regime.

Higher tax alone cannot protect domestic industry

“Input tax credit is merely a by-product of the tax channels unification and weeding out of redundancy and the cascading taxes rife in the previous system. What the government’s clarification intentionally misses to mention is that there is a slab of 0.25% for items like unpolished stones. If the intent of the government is to protect the domestic industry, as it seeks to claim, the spiel must be accompanied by concrete steps to help the Indian manufacturers, build capacity by way of a technology incubator and extend existing indigenous manufacturers’ scattered production centres into a nation-wide network of assistive device distribution, customisation and servicing,” the activists reasoned.