Why levying GST on products for assisting persons with disabilities is a step in the wrong direction

“People with physical or mental disability are not only among the most deprived human beings in the world,

“People with physical or mental disability are not only among the most deprived human beings in the world, they are also, frequently enough, the most neglected”

Prof Amartya Sen , Leading Economist and Nobel Laureate, keynote at the World Bank

 

Sadly, the statement remains largely true in the popular discourse for disability development in India. In a shocking move, the GST Council has decided to completely neglect the needs of citizens with disability and impose tax ranging from 5% to 18% across a range of assistive products including aids, appliances, prosthesis and technologies used by people with disabilities. All these items were earlier exempt from VAT and Customs Duty.

Assistive products help reduce significant barriers that they encounter while accessing education, employment and in civic life. Yet, in many low and medium income countries such as India only 5-15% of people who need assistive products and technology get access to them, according to the World Health Organization. The Three Year Action Agenda recently released by Niti Aayog has a actionable to improve access to aids and assistive technologies for persons with disabilities. It has set a target of providing aids to approximately 3.5 lakhs people with disability every year.This number is less than 2% of persons with disability in the country. Therefore, leaves a large gap to be addressed.

Further, according to Population Census 2011, 63.66% of the disabled population in our country is not employed. The majority of disabled non-workers are dependent on others and only a handful of them draw pension (more on pension later). Studies have indicated that the cost of living with a disability is about 25% to 40% higher than their non-disabled counterparts And often Assistive products and services constitute a substantial part of the additional costs. So, a substantial number of the disabled population is not employed and by imposing GST is only make life more harder for them and their families.

For the people who are not employed there is a disability pension scheme in the name of Indira Gandhi National Disability Pension Scheme (IGNDPS) which is the most popular pension program. The primary objective of this scheme is to provide monthly financial help for better and easier life and make people with disability independent. Under this scheme any person of age 18 years and above with 40% disability is eligible to get Rs. 300 per month up to 79 years and above that Rs. 500 per month. The number of beneficiaries covered under IGNDPS scheme during 2012-13 was 743,806. This is only a fraction 3.3 percent of the total disabled population, even with the most conservative estimate. These amount is barely adequate for survival, let aside bearing the cost of purchasing assistive products.

Let’s also talk about the Income tax exemptions for the disabled population who is employed. The maximum deduction for a person with disability under section 80u is INR 1, 25,000. This translates to an effective total saving of INR 37500 if one is in 30% tax-slab, 25000 if they are in the 20% tax-slab, INR 6250 for those in the 5% tax-slab and INR 0 for those in the 0% tax-slab. These savings are not adequate for the additional cost of living, for example, a car adaptations can cost anything in the range of INR 25,000 to INR 5, 00,000 in addition to the cost of the vehicle. Similarly, a decent laptop with a screen reader and other specialize assistive software used by the visually impaired can cost in the range of INR 30,000 to INR 1,00,000000.The most accessible smartphone is also about INR 20,000 to 50,000. Moreover, people with disability incur several additional expenses including for medical treatment, rehabilitation, care-giving, safer travel, accessible housing, accessible and inclusive education etc. Most of these expenses are recurring and not one time in nature. There are less than 2 percent of people who pay direct income tax. Out of those who pay taxes, a small fraction of them are in the 30% tax bracket. So, it won’t be wrong to assume that there are only a handful of people with disability who get this exemption, which is not  adequate and leaving a  substantial number of people  exposed and vulnerable to financial burden.

The disability sector is hopeful that the next meeting of the GST Council which is scheduled for 30th June will be more considerate to the needs of persons with disabilities. It is quintessential that the council recognizes these shortcoming and plays its role in reducing the burden on the disabled citizens. These are some of my recommendations

 

  1. All assistive products and services consumed by people with disability should be classify as 0% tax bracket of GST.
  2. These should include aids and appliances, assistive products/services improve accessibility and independent living, care-giving services,  and medicines (consumed repeatedly),  diagnostic equipment’s and healthcare/ medical treatment services for persons with disabilities.
  3. Further, the dialogue should not be restricted to specialize assistive products. There are a range of mainstream products such as smart mobile phones and laptops which are now imbedded with powerful assistive technologies.
  4. For such mainstream products   that may be ordinarily taxed in GST at a particular level, Aadhar based cash transfer system should be introduced for the reimbursement of the GST.
  5. There should be no income ceiling for reimbursement of GST amount if the good or services are being directly consumed by the individual with disability.

In conclusion any change in economic laws is an oppurtunity to do more for citizens in the country. I am hopeful that the government will recogniz the special needs of persons with disabilities and make the necessary changes to the GST construct.

 

Ankit is a marketing professional, social entrepreneur and a disability rights activist. He is the Director of DEOC a think tank working in the area of accessibility and inclusivity of persons with disability and a member of the National Committee for the Rights of Persons with Disability (NCRPD) set up by NCPEDP. Ankit’s twitter handle is @ankitjindal85. .

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