“The GST on aids and appliances for persons with disabilities is a reminder of Nangeli’s act of severing her breasts in protest against the Mula Karam or breast tax levied on women from lower castes in Kerala in the early 19th century. This reference is ingrained in the minds of every Malayali for its sheer unjustness — taxing a body part.” The Indian Express compared the GST on disability equipment and appliances for disabled people to the infamous breast tax of Kerala. They are trying to show the unfairness of taxing prosthetic arms and legs at 5% which are kind of necessary for PWD. Cosmetics like kajal, kumkum, bindis and bangles are not taxed at all.
GST Rates for Disability Equipment:
Disability Equipment with Nil GST Rate
According to the final GST rates, Braille Books will be taxed at 0% i.e. they are exempted from any tax. (Here is a list of more exempted goods and services).
Disability Equipment with 5% GST Rate
Assisstive devices and rehabilitation aids for physically challenged persons, listed below, have a concessional 5% GST rate:
- Braille writers and braille writing instruments;
- Handwriting equipment like Braille Frames, Slates, Writing Guides,
- Canes, Electronic aids like the Sonic Guide;
- Optical, Environmental Sensors;
- Arithmetic aids like the Taylor Frame, Speaking or Braille calculator;
- Geometrical aids like Combined Graph and Mathematical Demonstration Board, Braille Protractors, Scales, Compasses and Spar Wheels;
- Electronic measuring equipment such as Calipers, Micrometers, Gauges, Gauge Block Levels, Rules;
- Drafting, Drawing Aids, Tactile Displays;
- Specially adapted Clocks and Watches;
- Orthopedic appliances falling under heading No.90.21 of the First Schedule;
- Wheel Chairs falling under heading No.87.13 of the First Schedule;
- Artificial electronic larynx and spares;
- Artificial electronic ear (Cochlear implant);
- Talking books & large-print books, braille embossers, talking calculators & thermometers;
- Equipment for mechanical or computerized production of braille and recorded material such as braille computer terminals and displays, electronic braille, transfer and pressing machines and stereo typing machines;
- Braille Paper;
- All tangible appliances specially designed for use by the blind;
- Aids for improving mobility of the blind such as obstacle detecting appliance and white canes;
- Technical aids for education, rehabilitation, vocational training and employment of the blind;
- Assistive listening devices, audiometers;
- External catheters, special jelly cushions to prevent bed sores, stair lift, urine collection bags;
- Instruments and implants for severely physically handicapped patients.
Why most disability equipment is not exempt –
Exempting disability equipment under GST would not be a wise decision for many reasons. Firstly, 5% is the most beneficial tax rate under GST.
Secondly, most of the raw materials and services used for making these aids attract an 18% GST. Some sophisticated electronic inputs are in the 28% tax bracket. The suppliers can therefore claim input credit for the tax paid on input. Also, since the tax rate on input is higher, the entire 5% levy on the aids will be offset against the input taxes. This will lead to zero effective tax on the items making them cheaper.
In fact, the supplier will have surplus credit available in his/her account as the tax on most inputs is significantly higher at 18%. The suppliers can claim a cash refund for the credit remaining with them. If the appliances are exempt from tax, once cannot claim input tax credit. So, this will lead to an increase in the cost of these products.
An official statement also explained that if the equipment is exempted from GST, the 0% duty on imports will continue. So, domestically manufactured devices and equipment will have to bear the burden of input taxes. This increase in the cost will make the domestic products uncompetitive to their foreign counterparts.
There is a debate on the matter as Braille papers are still under the 5% tax slab. Charging tax on Braille papers would automatically make the books costlier. This move aims to give a boost to the domestic manufacturing of the devices. The policy makers are hoping that this will lead to a decline in the prices for such products.