Unpleasant excise duty imposition on Baby and clinical diapers and adult diapers and sanitary napkins brought down to 1%

By TIOL News Service

NEW DELHI, FEB 28, 2011: IN last year’s Union Budget, excise duty was imposed @16% on ‘Baby & clinical diapers and sanitary napkins’ with an immediate effect.  Fortunately, vide amending notification 10/2010-CE, a concessional rate of duty of 10% was prescribed for these goods.

We had, while carrying this above news item questioned the motive behind imposing duty on these goods and given the following justification for the same –

++ 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" are 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.

Incidentally, in our current Budget Run up section, we had also carried an article by senior citizens requesting that Adult Diapers be exempted by the Union Government. [See Exempt Adult Diapers – Request by Senior Citizens and a company wanting to manufacture!]

This sincere request does not appear to have fallen on deaf ears.  Vide amending notifications 4/2011-CE dated 1.03.2011 read with notifications 1/2011-CE and 2/2011-CE, the duty on these goods has been reduced to @1% without Cenvat Credit facility.  The general effective rate of 5% is also being prescribed on these goods without any conditions.

Aam admi is still in the reckoning…after all!