The Central government has presented a significant argument before the Delhi High Court, cautioning that any reduction in the Goods and Services Tax (GST) levied on air purifiers might set a problematic precedent. The submission came in response to a public interest litigation (PIL) seeking a slash in the current 28% GST rate on these devices, arguing they are essential for health in polluted cities like Delhi.
The Centre's 'Pandora's Box' Argument
In an affidavit filed before the court, the Centre, represented by the Ministry of Finance, articulated a firm stance. It stated that acceding to the demand for a lower GST slab for air purifiers could potentially open a 'Pandora's box' of similar requests for a multitude of other goods. The government's logic hinges on the principle of classification within the GST framework.
The affidavit emphasized that air purifiers are correctly classified under Chapter 84 of the GST tariff as 'electrical machinery and equipment'. This chapter attracts a standard rate of 28%. The government argued that singling out one product from this broad category for a concessional rate would lead to endless demands from manufacturers and users of other products within the same chapter, seeking similar tax benefits. This, they fear, would destabilize the tax structure and lead to significant revenue implications.
The PIL and the Demand for Health Essentials
The PIL, filed by an individual named Partho Mukherjee, forms the basis of this legal discussion. The petition contends that air purifiers should not be treated as luxury items but as essential health equipment, especially in the National Capital Region (NCR) and other parts of North India that grapple with severe air quality for a large part of the year.
The plea argues that the high 28% GST rate places these devices out of reach for a large section of the population who need them for basic respiratory health. It seeks a directive to the GST Council and the government to reconsider the classification and tax rate, potentially moving air purifiers to a lower slab of 12% or even 5%, aligning them with goods deemed necessary for life and health.
Broader Implications and Industry Perspective
This case highlights the ongoing tension between public health imperatives and fiscal policy. On one hand, there is a compelling argument about the right to breathe clean air and the role of technology in mitigating health hazards. On the other, the government must balance these demands with the integrity of its tax system and revenue needs.
The GST Council, the apex federal body for tax rate decisions, has previously considered and rejected representations for lowering the tax on air purifiers. The industry has long advocated for a rate reduction, stating that it would boost adoption, benefit public health, and ultimately grow the market. However, the Centre's latest affidavit suggests a firm reluctance to revisit the issue, primarily due to the cascading effect it might trigger across other product categories.
The Delhi High Court, after hearing the arguments, has listed the matter for further hearing on December 9, 2024. The court's eventual decision could have far-reaching consequences, not just for the price of air purifiers, but for the broader philosophy of how essential health-related goods are taxed in India.
For now, consumers hoping for a price drop on air purifiers due to a GST cut will have to wait, as the government's 'Pandora's box' warning casts a shadow over the immediate possibility of such a fiscal relief. The outcome will depend on whether the court views the public health argument as strong enough to override the government's concerns about tax structure stability.
