The government has once again failed India’s large community of people with disabilities, this time in its drafting of the Goods and Services Tax. Many assistive devices for persons with disabilities and services for the disabled will be taxed at between 5% and 18% under GST, which is scheduled to come into effect on July 1. The new tax rates demonstrate the government’s apathy to the needs of the disabled as well as the lack of consultation with the disability sector while formulating this new tax regime.
For persons with disabilities, assistive devices ensure personal mobility, communication and often mean the difference between a life of seclusion and a life of activity. To ensure the best possible outcomes for persons with disabilities, a comprehensive habilitation and rehabilitation programme that includes the availability of aids and appliances as per the choice and requirement of the individual is essential. Habilitation is the process of helping disabled people attain, keep or improve skills and functioning for daily living.
The United Nations Convention on the Rights of Persons with Disabilities, which India ratified in 2007, speaks of the right to personal mobility for persons with disabilities. State parties are supposed to facilitate access to quality mobility aids, devices, assistive technologies and forms of live assistance and intermediaries (like personal assistants, interpreters and service animals), including by making them available at affordable cost. This does not specifically mandate removing taxes and other levies on the assistive devices, nor does it mandate that these be provided free of charge, though it may be necessary in many cases.
The announcement of the rate slabs under the GST regime has included disability-related aids and appliances within taxable items. Currently, assistive devices are exempt from charges like Value Added Tax at the state level, central excise, customs and additional customs duties. These devices include wheelchairs, hearing aids and implants, prosthetics and orthotics that are worn to correct foot and ankle problems, artificial limbs and parts, crutches, cycle carriages, intraocular lenses and simple spectacles.
Under the GST regime, wheelchairs and many other items will be taxed at 5%. Orthopaedic appliances, including crutches, artificial limbs and hearing aids will be taxed at 12%. While products for the visually impaired were earlier notified at higher GST slabs, all products including braille paper, braille typewriters and braille watches will now also be taxed at 5%, while braille printed books will be exempt from tax. Adapted cars for physically handicapped persons will be taxed at 18%.
Disability rights activists rightfully believe that this move will make these aids and appliances unaffordable for persons with disabilities and impinges upon their right to life, communication and movement.
The availability of aids and appliances in India is extremely low. The government’s Assistance to Disabled Persons for Purchase/Fitting of Aids and Appliances or ADIP scheme is open to persons who have a personal income or family income (in case of dependents) not exceeding Rs. 15,000 per month.
Aids and appliances manufactured by the Artificial Limbs Manufacturing Corporation of India or ALIMCO and are distributed through various registered non-governmental organisations. The distribution of wheelchairs and tricycles under the scheme has been extremely poor, with no distributions between 2012-’13 and 2013-’14, and only 134 distributions till April 2015. By June 2016, ALIMCO reportedly reached out to 1.58 lakh beneficiaries by conducting 766 distribution camps throughout the country. However, these camps are conducted only upon the request of the ministry, local representatives or district authorities. For persons trying to access the scheme individually, the success rate is abysmally low. Obviously, they cannot afford to seek options from the private sector.
Even for families and individuals above the poverty line, the government fails to consider the additional cost costs of disability that may push them into poverty. Large parts of urban and rural India are disabled-unfriendly. People with disabilities cannot make use of public transport and may have to hire assistance and avail of rehabilitative services that take up a large portion of the family income. Even in high-income households, persons with disabilities get very little say in how much gets spent on them.
Bhargav Sundaram is the chief executive of Callidai Motor Works, a company in Chennai that manufactures motorised wheelchairs and other mobility aids for various impairments. In his experience, families that will buy motorcycles for their able-bodied sons without a second thought, worry about returns on investments on a motorised wheelchair. “They even weigh the cost against the possibly short lifespan of the individual, whereas for ourselves we believe that even if we are living for a day it should be the best quality of life.”
If the manufacturer wants...
As a manufacturer, Bhargav explains that in theory, the five percent tax slab under the GST regime may actually result in expensive assistive devices becoming more affordable. Because of the tax exemptions on assistive devices at present, manufacturers of assistive devices cannot take advantage of the input tax credit mechanism, whereby the credit of tax paid at every stage would be available as set-off for payment of tax at every subsequent stage. Manufacturers of assistive devices were paying taxes on supplies but could not set these off against the final sale. Under the GST regime, if the manufacture of a Rs one lakh motorised wheelchair involved the payment of Rs 20,000 in tax, the manufacturer can seek a rebate of that amount minus five percent. In effect, Rs 15,000 can be claimed as a refund or carried forward, which may be passed on as a benefit to the end consumer. Of course, as Bhargav points out, this is entirely up to the manufacturer. Other manufacturers of goods that are otherwise high in demand may not find any incentive to reducing prices without a government directive to that effect.
In terms of services, there appears to have been no specific consideration for the requirements of persons with disabilities. The existing service tax regulations exempt services rendered by charitable institutions registered under Section 12AA of the Income Tax Act for “care or counseling of terminally ill persons or persons with disabilities”. The requirements of persons with disabilities have gone beyond care and are more on the lines of empowerment – they may need interpreters for sign language, augmentative and alternative communication charts, skill coaching, service animal training and personal assistants. They may choose to receive services from individuals not affiliated to charitable institutions. These services, which are extremely beneficial for persons with visible and invisible impairments, are unregulated at present and a service tax at 18% under GST may discourage their usage.
While drafting and determination tax rates of goods and services for persons with disabilities, the government has failed to consult with the disability sector as to the potential impact. There has also been no attempt to make information regarding GST accessible to persons with disabilities or available in simple language formats for a larger audience. Since different interest groups appear to have found success in seeking exemptions, the realities of the lives of persons with disabilities too requires consideration to ensure that they have choice and control in affording quality assistive devices. Before calling upon persons with disabilities to contribute to the state exchequer when they purchase their bare necessities towards a dignified life, there needs to be consideration of what the state has done to treat them as equal citizens.
Amba Salelkar works on disability law and policy at the Equals Centre for Promotion of Social Justice, Chennai. The views expressed here are personal.