Evasion of GST in respect of Hand Sanitizers (Alcohol Based)

Directorate General of GST Intelligence

Date: 10.06.2020

To, 

Pr. Chief Commissioner/ Chief Commissioner, CGST & CX

All CGST and CX Zones (Lists Attached)

Madam/Sir,

Subject: Evasion of GST in respect of Hand Sanitizers (Alcohol Based)- Intelligence-Regarding.

Central Economic Intelligence Bureau, New Delhi, has, vide F. No. 01/JS/EI/2020-CEIB dated NIL (copy enclosed) informed that some manufacturers of “Hand Sanitizers (Alcohol Based)” are wrongly classifying the said item under tariff heading 3004 (12% GST) whereas the said item is liable to be classified under tariff heading 3808 (18% GST). In this regard, classification opinion of WCO has been relied upon. It has also been informed vide above-mentioned letter that Sugar Mills and distilleries are also engaged in manufacturing/supplying alcohol-based hand sanitizers and are classifying the same under tariff heading 3004 (12% of GST) of HSN whereas the same is correctly classifiable under heading 3808 (18% GST) of HSN. Thus, the misclassification of ‘Hand sanitizers’ (Alcohol Based) appears to have resulted in substantial evasion of GST.

2. Intelligence furnished by the CEIB has been further developed in the DGGI Hqrs. A list of 62 manufacturers/ suppliers of the above-said item was prepared by the DGGI Headquarters by identifying the manufacturers with the help of the online shopping platforms, such as Amazon, Flipkart, Snapdeal, Paytm, etc. and has been analyzed in DGGI. While the misclassification of Hand Sanitizers produced under various established brands is being looked into by various Zonal Units of DGGI, it is requested that misclassification of Hand Sanitizers manufactured/supplied by sugar factories/distilleries in your jurisdiction may kindly be varified at your end in order to plug any revenue leakages.

3. The result achieved in this regard may be communicated to this office due course of time.

4. This issues with the approval of Principal Director General, DGGI.

Yours faithfully,

(Sanjeev Kumar Singh)

Additional Director

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