NEW DELHI: Indian companies with turnover of less than Rs 20 lakh producing sanitary napkins stand to gain from the government's decision to impose 12 per cent GST on the menstrual hygiene product manufactured by multinationals, Union minister Maneka Gandhi said today.
Sanitary pads were placed in the 12 per cent tax slab when the Goods and Services Tax regime was implemented on July 1, 2017, though several other products such as sindoor and bangles were declared tax-free.
"If we take it (GST on sanitary napkins) to zero, then the multinationals have the power to spread laterally, thereby, blocking off any kind of indigenous growth," the women and child development minister said at an event organised by PHD Chamber of Commerce.
"So, if we put 12 per cent on MNCs, while at the same time allowing that any company below Rs 20 lakh will get zero taxation under GST, you then allow all NGOs and women's groups to come up and become entrepreneurs and sell sanitary towels," she said.
Gandhi had written to Finance Minister Arun Jaitley in March last year asking him to provide 100 per cent tax exemption for eco-friendly and biodegradable sanitary napkins under GST.
On July 10, 2017, the Finance Ministry had put out a statement, saying the tax on sanitary napkins under the GST was less than what it was before.
The ministry said the napkins were taxed a total of 13.68% before the GST was implemented because a concessional excise duty and VAT was levied on them.
The government lowered the Goods and Services Tax rates on several items since the indirect tax regime was implemented in 2017.
However, the changes didn't apply to sanitary napkins.