Unpleasant Excise duty imposition on Baby and Clinical diapers and sanitary napkins

By TIOL News Service

NEW DELHI, FEB 28, 2010: TAKE a look at the following Tariff Item/headings along with Tariff rates of duty as they stood before the presentation of the Finance Bill, 2010 on 26.02.2010.

Vide clause 74 of the Finance Bill, 2010, the Ninth Schedule has been inserted and whereby in the First Schedule to the Central Excise Tariff Act, following amendments have been as regards the aforesaid Tariff Item/headings.

As per clause 3 of the said Ninth Schedule, in Chapter 48, in heading 4818 -

(i)  in tariff item 4818 40 10, for the entry in column (4), the entry “16%” shall be substituted;

(ii)  in tariff item 4818 40 90, for the entry in column (4), the entry “16%” shall be substituted;

The aforesaid amendment results in withdrawing “Nil” Tariff rate of duty on ‘Baby & clinical diapers and sanitary napkins” and imposing a duty of 16% and too with an immediate effect as clause 74 has been declared under the Provisional Collection of Taxes Act, 1931. Immediate means changes in rates of duty take effect from the midnight of 26 th February/27 th February of 2010.

Fortunately, vide Notification 10/2010-CE, dated 27.02.2010, [sr. no. I(xxxi)] amendments have been made in an existing notification 4/2006-CE dated 01.03.2006 so as to insert new entries 96B and 96C to cover “Baby and Clinical diapers” and “Sanitary napkins” and grant them a concessional rate of duty of 10%.

Big deal, one may say, but were these goods liable to be taxed?

Let us note the following - Diaper (in North America ) or nappy (in the United Kingdom , Ireland , Australia and many Commonwealth countries ) is a sponge-like garment worn by individuals who are incapable of controlling their bladder or bowel movements, or are unable or unwilling to use a toilet . Diapers have been worn throughout human history, and made of cloth or disposable materials. Whereas cloth diapers are composed of layers of fabric such as cotton or micro-fiber and can be washed and reused multiple times, disposable diapers contain absorbent chemicals and are thrown away after use. Diapers are primarily worn by children who are not yet potty trained or suffer from bedwetting . However, they can also be used by adults who suffer from incontinence . These can include the elderly and those with a physical or mental disability . Terms such as " incontinence pads " can be used to refer to adult diapers.

Considering the fact that “Baby and clinical diapers which are also known as adult diapers” are goods meant for babies and by adults who suffer from incontinence, the Central government ought to have chosen some other mode of garnering revenue than punishing the unfortunate. Similarly, as far as usage of “Sanitary napkin” is concerned, the Central government appears to have missed out on the study conducted by UNICEF in India and the findings arrived. UNICEF seeks to promote the use of sanitary napkins on the ground that a direct impact can be expected on women's health who are vulnerable to bacterial and fungal infections with the traditional method of using cloth.

It is hoped that the government does a re-think on this issue.

Obviously, there is no need to ‘pamper' or ‘hug' any one!