In the next 57th meeting, the GST council may acknowledge a tax reduction on air and water purifiers because of the poor air quality across the country, and access to safe drinking water remains uneven. The council can analyse reducing the goods and services tax (GST) on air and water purifiers for domestic use from 18 per cent to 5 per cent, reclassifying them as essential items instead of discretionary consumer goods.
According to industry estimates it recommending a lower GST rate can lessen the retail prices by 10 to 15 per cent, which makes reliable purification technology affordable for lower-income families.
No clarification is available on when the next 57th GST council meeting shall be held. No answer is obtained for the email sent to the finance ministry.
In the last meeting of the council held in September for its 56th session, the rates on purifiers remained unchanged at that time. As per officials, the issue is under active consideration; however, any reduction shall need consensus among state finance ministers.
In recent weeks, the pressure on the council has surged. The Delhi High Court on December 24 sought the government to convene a GST council meeting, virtually if not physically, as soon as possible to consider the reduction of GST on air purifiers, quoting worsening air quality across Delhi-NCR. The Centre told the court that such a move “will open a Pandora’s box” but added that the matter “will be considered”.
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“There is a process…We are not saying whether it will be done or not,” additional solicitor general N Venkataraman told the court, claiming that GST Council meetings should be held physically and cannot be convened via video conferencing.
The intervention of the court has arrived after a public interest litigation filed by advocate Kapil Madan, who said that charging tax on purifiers at 18 per cent by treating them as “luxury” items undermined public health.
There is pressure from the political side. Former Delhi chief minister Arvind Kejriwal, in November, urged the centre to remove the GST on both air and water purifiers. Industry and trade bodies suggest that the government should reduce the rate to 5%.
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The Parliamentary Standing Committee on Science & Technology, Environment, Forests and Climate Change, supporting such demands, has suggested in its December report that GST on air and water purifiers and their consumable parts must be reduced or removed. The committee mentioned that citizens must not be penalised for attempting to secure clean air and safe drinking water.
The reduction of 5% GST shall be a practical and policy-aligned step. With strengthening judicial scrutiny on pollution control and the rising recognition of clean air and water as essential public health necessities, such products could no longer be considered as luxury goods. A lesser GST rate shall democratise access to essential purification technologies and align indirect tax policy with sustainability and health equity goals.
A tax expert mentioned that manufacturers encounter the risk of collecting excess ITC because of the higher GST rates on components as well as raw materials, making the case of rationalising the rate structure stronger.
Source: Business Standard
