Could the GST Council Reduce Tax on Air and Water Purifiers to 5%?
Synopsis
Key Takeaways
- GST on air and water purifiers may drop from 18% to 5%.
- This could lower retail prices by 10-15%.
- Reclassification as essential goods is being considered.
- Pressure for this change has increased following court directives.
- Public interest litigation is advocating for purifiers to be classified as medical devices.
New Delhi, December 30 (NationPress) - The GST Council is contemplating a substantial reduction in the goods and services tax on air and water purifiers intended for household use, potentially lowering it from 18% to 5%. This reclassification would position them as essential goods rather than luxury items.
This tax cut could lead to a decrease in retail prices by approximately 10-15%, thereby enhancing affordability for low-income households, especially as air quality continues to deteriorate across the nation and access to safe drinking water remains inconsistent, according to various reports from sources close to the situation.
The timeline for the next GST Council meeting is currently uncertain. The last meeting took place in September during the 56th session, where the tax rates for purifiers remained unchanged, with officials indicating that any tax reduction would necessitate agreement among state finance ministers.
Following a recent directive from the Delhi High Court, which urged the government to convene a meeting—if necessary, virtually—to discuss the potential reduction or elimination of GST on air purifiers due to the deteriorating air quality in the Delhi-NCR region, pressure on the Council has increased.
“There is a process… We are not declaring whether it will happen or not,” stated additional solicitor general N Venkataraman during the court proceedings, emphasizing the need for physical meetings.
The Delhi High Court remarked that if clean air cannot be guaranteed for the populace, at the very least, the GST on air purifiers should be lowered.
This remark came during the hearing of a public interest litigation (PIL) that sought to classify air purifiers as medical devices, prompting the Centre to provide immediate guidance on offering a temporary GST exemption.
The PIL argued that air purifiers fitted with High-Efficiency Particulate Air (HEPA) filters serve a preventative health function by minimizing exposure to PM2.5, PM10, and other toxic pollutants that can exacerbate respiratory and cardiovascular issues.
Former Delhi Chief Minister Arvind Kejriwal has advocated for the complete removal of GST, while various trade organizations have requested a 5% tax rate.