IASbhai Daily Editorial Hunt | 7th Nov 2020
“Everything has beauty, but not everyone can see.” – Confucius
EDITORIAL HUNT #229 :“GST on Mobility Aids of Disabled is Appropriate ?”
GST on Mobility Aids of Disabled is Appropriate ?
Suhrith Parthasarathy is an advocate practising at the Madras High Court
Market dictates and a blow against equality
The GST levy on mobility aids places a prohibitive burden on the ability of disabled citizens to lead a dignified life
SYLLABUS COVERED: GS 3 : GST
It is time we recognised that an unreasonable levy on mobility aids can deeply compromise fundamental human needs of disabled people. Comment -(GS 3)
- Power of Judicial Review vs GST
- Tax and Fundamental Rights
- Market Forces at play
- A reasonable classification
- SC ON MOBILITY AIDS USED BY DISABLES : The Supreme Court of India recently heard brief arguments on the constitutional validity of the levy of Goods and Services Tax (GST) on mobility aids used by disabled citizens.
- NIPUN MALHOTRA VS.UNION OF INDIA : The petitioner argued that the tax imposed on these products, which included wheelchairs, tricycles for the disabled, braille paper and braille watches, was patently discriminatory.
- POWER OF JUDICIAL REVIEW : A decision to impose a tax, it said, was a matter of policy over which the judiciary ought not to ordinarily interfere.
- SC SUGGESTION : SC suggested that the petitioner exhaust his options by submitting his grievances to the GST Council, which is the governing body responsible for determining which products are taxed, and at what rate.
TAX AND A FUNDAMENTAL RIGHT
- REASONABLE APPROACH : If the GST Council reject the petitioner’s plea, it would be imprudent of the Court not to test the legitimacy of the levy.
- AMBIT OF JUDICIAL REVIEW : Judiciary must recognise that there is nothing inherently distinct about taxing laws; they are in no way complete and do not come under judicial review.
- TAXES IMPACT SOCIETY : Contrarily, taxes have been a direct bearing on how society is arranged.
- RIGHT TO SPEND (FUNDAMENTAL RIGHT ) : The nature and rate of tax imposed on a product can impinge both on a person’s freedom and on a person’s right to be treated with equal care and concern.
- ELSEWHERE IN THE WORLD : As the top courts in Canada and Colombia, among others, have recently held — to examine whether or not an imposition of a tax violates a fundamental right.
MARKET FORCES ARE AT PLAY
- GRAND OPENING : The GST regime was launched amid much fanfare with the idea of simplifying India’s complex and multi-layered tax structure.
- IDEOLOGY : It started with a view to fashioning the country into a unified, common market, in which the levy of GST will subsume almost all other extant indirect taxes.
- TRANSFORMATIVE APPROACH : At the time of its inception, the State claimed that the causes of liberty and equality would benefit from the States pooling their sovereignty together with that of the Union.
- DETERRING STATE’S AUTONOMY : But what we have seen since is that with the withering of the States’ fiscal autonomy, it is the dictates of the market alone that appear to determine how and what goods are taxed.
- PREVIOUS TAXATION REGIME : Until the advent of the GST, mobility aids were almost entirely immune from indirect taxes.
- EXEMPTED DISABLED COMMODITIES : In virtually every State, exemptions were granted on the payment of value-added-tax on such goods.
- AFFRONT TO DIGNITY : The State claims that it cannot relieve mobility aids from taxation, because to do so will disincentivise domestic manufacturers.
- PROTECTING MANUFACTURER : This argument is influenced by the GST’s structure, in particular the manner in which firms are allowed to claim credit on taxes paid by them in the making of a product.
- TAX CALCULATION : Commodities will be entitled to claim credit for the tax paid when it remits the levy collected from the eventual purchaser of the product.
PARLIAMENT CAN FIND A WAY
- EXEMPTIONS : Many other products that are essential to human needs are exempt from tax
- LEGISLATIVE DESIGN : The grant of an exemption in cases such as these would disentitle manufacturers from claiming input tax credit is a matter of legislative design.
- A CHANCE OF REBATE : A set off against taxes collected from the eventual consumers can scarcely be seen as the only legitimate mechanism available to ensure that a rebate is provided.
- OTHER PLANS : State can exempt firms from paying taxes on inputs on the condition that such inputs will be used to manufacture mobility aids.
A REASONABLE CLASSIFICATION
- A MATTER OF CLASSIFICATION : Ultimately, a decision taken on exempting goods from taxation is a matter of classification.
- EQUALITY CODE : The Constitution’s equality code requires such a classification to be a reasonable one.
- RIGHT TO DIGNITY : The tax places a prohibitive burden on the ability of disabled citizens to access the most basic goods, to lead lives with dignity.
- EQUITABLE SHARE : Given that the classification rests on a state of disability, it must be seen, on any sensible consideration of our equality jurisprudence, as, at least facially, inequitable.
- THE ONUS IS ON THE STATE : State should show the Court that it had cogent reasons for treating these goods as distinct from other commodities that are exempt from tax.
- LESSONS FROM GLOBE : The GST Council can take a leaf out of the books of Canada and Australia, and grant a complete exemption on the levy imposed on mobility aids.
- TAX FREE NETS : To free taxing statutes from the ramparts of the Constitution is to risk the entrenching of inequality.
SOURCES: THE HINDU EDITORIAL HUNT | GST on Mobility Aids of Disabled is Appropriate ?