The central government has been on record to oppose the proposal of the decrease in the Goods and Services Tax (GST) on air purifiers on the basis that the proposal has far-reaching fiscal consequences and a Pandora box of many other consumer goods to demand the same. As the pollution rates continue to be threatening in the big Indian cities, there has been an escalation in the discussion of whether health-related devices such as air purifiers should be charged luxury rates or not, both in terms of the industry reaction and the population examination.

The Free Offer and the Rejection.

Some of the state legislators, consumer organizations and industry associations had been advocating a reduction of the existing GST imposed on air purifiers at 28 percent rate, which is same as that imposed on luxurious goods of 28 percent, to 12 or 18 percent. They claimed that air purifiers are now a necessity health-related product, not a luxury item, in the areas where the air quality continuously belongs to the category of severe ones. The proposal came into momentum especially following the high air quality index (AQI) of over 400 that was registered by the National Capital Region and Lucknow, and some north Indian metropolises in early winter.

In a recent gathering of the fitment committee of the GST Council however, the Centre declined the proposal and indicated that such provision might trigger similar requests on other health products, which were lifestyle based like water purifiers, air conditioners and water dehumidifiers. One of the officials who were present in the meeting claimed that, once we open one door, there will be many others that will come. This would end up watering down the revenue base of GST. Officials made it clear that the government must not precedence as a hindrance to the standard tax regimes delivered by the GST regime.

Government’s Rationale

The rationalization of the Centre derives its justification in the financial prudence and the necessity to preserve the stable taxations. Air purifiers as officials claim, remains a taxation wise category of non-essential household appliances. They say that by lowering the GST rate they would lose a substantial amount of revenue with very limited social benefits. The government has also indicated that the devices are mainly used by the urban middle and upper households so it would be hard to consider the devices as basic health products to be given the tax relief.

According to sources in the Finance Ministry, the government is concerned with an unequal demand on taxation and that this can put the GST structure askew. Each industry has an authentic narrative such as water purifiers are good at health, fitness gear is beneficial to disease, and mattresses are favorable to the spine. When we start making value judgments, taxation consistency will fail, as one of the officials remarked. The comment was made after an internal review warned against giving one exemption, as it would be like a flood of other petitions in other industries.

Response in the Industry and Public.

The logic of the government, though, has been challenged by the manufacturers and traders of air purifiers. They present the view that air quality in India cities has risen to be a nationwide health emergency and not urban lifestyle issue. Manufacturers of air purifiers argue that portraying them as luxuries overlooks the value of air purifiers in reducing respiratory diseases that are caused by pollution. The industry organizations like the Consumer Electronics and Appliances Manufacturers Association (CEAMA) have recommended that the Centre re-evaluate the classification since other countries impose very little or no tax on gadgets that are directly associated with health protection.

Even the experts in the field of public health have made their contribution to the issue. As doctors have noted, in cities such as Delhi, Kanpur, and Ghaziabad where the levels of particulate matter often exceed the acceptable levels, air purifiers have become a need especially among children, the elderly and asthmatic people. According to them, high taxes, in effect, render such protective devices unaffordable to the most affected groups in the society by pollution.

Broader Implications

The discussion transcends one category of product- it poses some of the most basic issues that the government has hit on the definition of luxury and necessity in the urban lifestyle of today. With the rising level of climate and environmental concerns, products that were otherwise deemed as optional are now becoming more and more a necessity to the bare minimum of health standards. The opponents of the existing tax position argue that the policy of holding on to an old classification poses a threat of compromising the health of the people and the objective of fair taxation.

Nevertheless, the Centre does not feel optimistic. Authorities note that GST rulings have to strike a compromise between social and economic facts. They emphasize the fact that GST rates are only reviewed in case of large-scale social agreement or visible economic advantage. Despite being aware of the anxieties associated with pollution, air purifiers are not yet, as the high-ranking finance official remarked, as important as other basic items such as medicines or medical oxygen.

The Way Forward

This would probably emerge once again in the following GST Council meeting with other states such as Delhi and Punjab likely to reiterate their call to rationalize the rates. The Council can refer to a technical sub-committee to examines comparative international taxation structures and gives a report on the exemptions that relate to health. In the meantime, air purifiers will remain subject to 28 percent GST meaning that their retail price will remain high when the ailments associated with pollution are on the increase.

The strong position of the Centre can be seen as part of its overall reluctance to reopen closed categories of taxation. However, the increasing air pollution and the increasing education of people about the issue brings about pressure to adopt a middle ground which ensures the interests of both revenue and citizens to clean air are respected. The future of the government in India to manoeuvre itself around the nexus of environment, health, and taxation will be determined by whether the government will change policy to follow the fiscal line or not.