New Delhi: The 5 per cent Goods and Services Tax (GST) on devices used by phyically challenged would actually lead to a reduction in their prices, the Union Finance Ministry said on Tuesday.
"5 per cent GST rate on these devices/equipments would 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 devices/equipment would result in reduction of the cost of domestically manufactured goods, as compared to the pre-GST regime," the ministry said in a statement.
The official clarification comes after Congress criticised the governemnt for levying GST on wheelchairs and Braille typewriters and demanded a full roll-back of the "disability tax".
"GST on disability aids like wheelchairs and Braille typewriters, once again shows this government's complete insensitivity towards our most vulnerable," Congress Vice President Rahul Gandhi said in a tweet on Monday.
The Finance Ministry statement, noting that "questions are raised about GST rates fixed for specific devices for physically challenged persons", said that most of the inputs and raw materials for manufacture of these assistive devices/equipments attract 18 per cent GST.
"The concessional 5 per cent GST rate on these devices/equipments would enable their domestic manufacturers to avail input tax credit of GST paid on their inputs and raw materials.
"Further, the GST law provides for refund of accumulated input tax credit, in cases, where the GST rate of output supply is lower than the GST rate on inputs used for their manufacture," it said.
The ministry contended that if these devices/equipments are exempted from GST, then while imports of such devices/equipments would be zero rated, such domestically-manufactured devices/equipments will continue to bear the burden of input taxes, increasing their cost and resulting in negative protection for the domestic value addition.
"The 5 per cent concessional GST rate on such devices/equipments will result in a win-win situation for both the users of such devices, the disabled persons, as well as the domestic manufacturers of such goods. It is for this reason that the Council has kept these items in 5 per cent rate slab," it said.
Assistive devices and rehabilitation aids for physically challenged persons, which have been kept at 5 per cent GST rate, include Braille writing instruments, canes, electronic aids like the sonic guide, arithmetic aids like the Taylor Frame (arithmetic and algebra types), Braille calculators, electronic measuring equipment such as callipers, drafting and drawing aids, orthopaedic appliances, wheel chairs, artificial electronic larynx and artificial electronic ear.
Talking books (in the form of cassettes, discs), talking thermometers, Braille computer terminals, Braille paper, all tangible appliances designed for use by the blind, Braille typewriters, Braille watches, teaching and learning aids for blind, urine collection bags, instruments and implants for severely physically handicapped and joints replacement and spinal instruments have also beenk kept in the 5 per cent GST slab.