The Math behind 12% GST on Sanitary Napkins

Sanitary Napkins GST

The GST was announced with much fanfare and enthusiasm by the government in July. But there was one sticky issue for which the government got a lot of stick for. The decision to tax sanitary napkins at 12% didn’t go down well especially when Bindi and Sindoor were placed under the 0% GST bracket. Much had been written about this contentious issue and the government was labelled as patriarchal.

So why is the government taxing an essential commodity? Will abolishing GST really help in the market penetration of sanitary napkins in rural areas?

Right from the beginning, the BJP has defended itself citing the fact that under the previous taxation regime, sanitary napkins were taxed at 13% and GST, in fact, has reduced the tax on the napkins. This argument found few takers as one important detail was either conveniently left out by the Lutyen’s media or wasn’t conveyed properly by the government. Sanitary napkins under the 12% bracket, receive an input tax credit. Input tax credit means that a business can reduce the taxes it has paid on inputs from the taxes it has to deposit on output. This means that the manufacturers will only add the tax on the value done by them and not on the entire product i.e. purchase of raw materials etc. So, the consumers don’t end up paying 12% GST on sanitary napkins but pay around 3-4% GST after availing input credit from the government.

Now, an argument can be made why should women pay even 3-4% tax on sanitary napkins considering the fact that it’s not their choice to bleed?

If the government removes GST from sanitary napkins, it would end up making the napkins costlier. If GST is removed, manufacturers would no longer avail input tax credit on the raw materials they purchase i.e cotton which is taxed at 18%. This would increase the manufacturing cost which the manufacturers will end up passing on to the consumer and make the locally manufactured napkins more expensive. The government cannot remove the tax on the raw materials as there is absolutely no way to know whether the cotton will be used up in textile industry or for the manufacturing of sanitary napkins.

This, in turn, will lead to the country getting flooded with Chinese goods. Imports are charged at just 12% IGST (Integrated GST) as the erstwhile excise duty, customs duty is now history. In addition, Chinese products exported from China are exempt from export duty in their country.This will make Made in China sanitary napkins much cheaper than the locally manufactured sanitary napkins. The quality of almost all the Chinese products is for all to see and low-quality sanitary napkins are certainly not the need of the hour. Start-ups like Saathi and people like India’s Padman Arunachalam Muruganantham, who aim to create high quality and eco-friendly sanitary napkins will be the hardest hit in this eventuality.

The government received a lot of flak for keeping sindoor and bangles under the 0 percent slab and some sections of media accused it to have the typical Neanderthal Hindutva mindset of a BJP government. Now, in order to have a smooth transition to GST, most of the GST rates of the commodities have been kept as close as possible to the pre-GST. Sindoor and bangles were under the 0 percent slab under previous governments too. Why didn’t the Lutyen’s media didn’t question their darling Rahul Gandhi then who somehow before every election is “relaunched” by the same section of media? Sindoor and Bindi come under the unorganised sector and taxing these commodities would act as a death knell to the sector.

Senior journalists like Barkha Dutt accused the government to have a pro-male bias and labelled it as patriarchal because of condoms (because allegedly condoms are for the benefits of males only) under the 0 percent slab. Yes, condoms are primarily for birth control, but don’t they stop the prevention of sexually transmitted diseases and HIV which can affect both the genders and India, by all means, is in no shape to afford a population boom. Instead of accusing the government to have a gender bias, a closer look into the GST rates would reveal that all contraceptive devices such as diaphragms and cervical caps used by women are under the 0 percent slab. So where is the alleged gender discrimination and patriarchy?

Under the previous tax regime, the MRP of a pack of 10 belted sanitary napkins of a multinational brand cost Rs 85. The pre-tax price then works out to Rs 76. So zero rating sanitary napkins results in a difference of only Rs 9 on a packet of 10 napkins. Is it the argument of those who are rooting for 0 percent duty that a person who finds a packet priced at Rs 85 unaffordable will find a packet priced at Rs 76 affordable?

Now the MRP of pack of 10 sanitary napkins is Rs 80-85(accurate number is not available due to the numerous variations in types of sanitary napkins and GST still being in its early stages )under the present taxation regime meaning that the costs have come down marginally under GST instead of it being increased as previously alleged.

Mind you this is the price of sanitary napkins of multinational brands which low-income women can in no possible way afford even with 0 percent tax. They rely on locally manufactured sanitary napkins which cost around RS 50-55 for a pack of 10. The same manufacturing units who would have to increase their prices if sanitary napkins are placed under the 0 percent slab thus making them unaffordable for the low-income groups which would in turn already worsen the poor state of menstrual hygiene in India.

Finance Minister Arun Jaitley defended the 12% GST on the sanitary napkins and said the outrage is due to “ill-informed” information and rightly so. How the Lutyen’s media conveniently ignored the input tax credit on the napkins and spread wrong information across the country. One such example can be that of Ms Faye D’Souza who in a series of tweets displayed her anger against the 12%GST and said that under the previous taxation regime the VAT on sanitary napkins used to vary from 4.5 to 13.86% as some states like Gujarat, Delhi etc charged low VAT on sanitary napkins. She alleged the women in these areas will have to shell out more the same quantity of napkins. However, she forgot one important detail. The VAT intact varied from 5 to 14.5% pre-GST and an excise duty of 6% had to be added in the MRP, thus comfortably making them costlier then under the present regime. Also, notwithstanding the fact that the reduced VAT in most of the cases was not passed onto the consumers by the manufacturers.

The market penetration of sanitary napkins in India is just 16% which is even lower than some African countries who are largely underdeveloped. Kenya has a market penetration of 30%. Menstrual hygiene is a serious issue which has not got the attention it deserves. But is zero rating sanitary napkins the right answer? Evidently not. Except for the price, the myths and taboo surrounding menstruation hinder India’s path toward menstrual hygiene. All women must have every right to have access to low cost, high-quality sanitary pads and a solution must be found. Perhaps, teaching the necessity of menstruated hygiene in schools will be a great step.Hardly any school teaches or wants to discuss menstrual hygiene, only worsening the current situation and exposing teenage girls to harassment just because of a completely natural biological cycle. The government must give more incentives to the local manufacturers and back them to produce low-cost sanitary napkins and on the same hand, they should spread the benefits and necessity of menstrual hygiene especially in rural areas. The country is begging for an informed debate on this critical issue. Menstrual hygiene must not be taken lightly anymore given the sorry state of its condition in India.


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Yash Joshi

Aspiring Civil servant ,hell bent on bringing about a positive change in India .
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