pnn & agencies
New Delhi, July 4: The government Tuesday clarified that prices of assistive devices and rehabilitation aids for the disabled will not rise under Goods and Services Tax (GST) regime. It added that the prices of domestically produced assistive devices will come down and domestic manufacturing will get a boost under the new taxation regime. Congress leader Rahul Gandhi had earlier stated that GST rates were “insensitive” to the disabled.
A release issued by the ministry of finance stated: “5 per cent GST on these devices/equipment will enable their domestic manufacturers to claim refund of any accumulated Input Tax Credit. That being so, the 5 per cent concessional GST rate on these will result in reduction of cost, compared with the pre-GST regime.”
Most inputs and raw materials required for manufacture of such devices attract 18 per cent GST. Domestic manufacturers will, therefore, be able to avail accumulated input tax credit on these as the consumer tax falls in a lower GST slab of 5 per cent.
The ministry further said that domestic producers will have to bear the burden of input taxes if they were exempted from GST. “If these [devices] are exempted from GST, while imports of these products will be zero rated, domestically manufactured devices will continue to bear the burden of input taxes, increasing their cost and resulting in negative protection for the domestic value addition,” the release stated.
From Braille writers and Braille paper to wheelchairs, talking books, assistive listening devices and implants for the severely physically-challenged, as many as 22 items attract a Goods and Services Tax (GST) of 5 per cent.
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 with imports.