Context: The GST levy on mobility aids places a prohibitive burden on the ability of disabled citizens to lead a dignified life

• The Supreme Court of India heard brief arguments on the constitutional validity of the levy of Goods and Services Tax (GST) on mobility aids used by disabled citizens.
• The petitioner, in Nipun Malhotra vs. Union of India, argued that the tax imposed on these products, which included wheelchairs, tricycles for the disabled, braille paper and braille watches, was patently discriminatory.
• But the Court indicated that the scope of its power to review the levy was slender.
• A decision to impose a tax, was a matter of policy over which the judiciary ought not to ordinarily interfere.

Tax and a fundamental right

• GST Council rejected the petitioner’s plea, it would be imprudent of the Court not to test the legitimacy of the levy.
• To ensure that the judiciary does not sit on judgment over matters that fall within the domain of legislative and executive competence, it must recognise that there is nothing inherently distinct about taxing laws; they are in no way plenary and unamenable to judicial review.
• Taxes have a direct bearing on how society is arranged.
• The nature and rate of tax imposed on a product can impinge both on a person’s freedom and on a person’s right to be treated with equal care and concern.
• Therefore, it ought to be well within an independent judiciary’s province — as the top courts in Canada and Colombia, among others, have recently held — to examine whether or not an imposition of a tax violates a fundamental right.

Market forces are at play

• The GST regime was launched in 2017, with the idea of not only simplifying India’s complex and multi-layered tax structure but also with a view to fashioning the country into a unified, common market, in which the levy of GST will subsume almost all other extant indirect taxes.
• To that end, the GST serves as a consumption tax on the supply of all manners of goods and services.
• But its functioning has proved far from transformative.
• At the time of its inception, the central government claimed that the causes of liberty and equality would benefit from the States pooling their sovereignty together with that of the Union.
• It is withering States’ fiscal autonomy, it is the dictates of the market alone that appear to determine how and what goods are taxed.
• The levy on commodities used by the disabled is a prime example of this.
• Until the advent of the GST, mobility aids were almost entirely immune from indirect taxes.
• In virtually every State, exemptions were granted on the payment of value-added-tax on such goods.
• The GST did away altogether with this exemption. Indeed, it was only after substantial outcry that the originally proposed 18% tax on these devices was reduced to 5%.
• But even at that rate, as the petition in the Supreme Court demonstrates, the levy increases manifold the prices of commodities that allow the disabled to perform the most basic tasks — in this case, to walk or to read.
• Despite this affront to dignity, the government claims that it cannot relieve mobility aids from taxation, because to do so will disincentivise domestic manufacturers.

Parliament can find a way

• Reading of the various notifications issued by the GST Council shows that many other products that are essential to human needs are exempt from tax — notably, in 2018, the levy imposed on female personal hygiene products (tampons and sanitary pads) was removed.
• Grant of an exemption in cases such as these would disentitle manufacturers from claiming input tax credit is a matter of legislative design.
• Parliament cannot find other ways to ensure that domestic manufacturers are granted credit for the taxes that they pay on inputs.
• A set off against taxes collected from the eventual consumers can scarcely be seen as the only legitimate mechanism available to ensure that a rebate is provided.

A reasonable classification

• A decision taken on exempting goods from taxation is a matter of classification.
• The Constitution’s equality code requires such a classification to be a reasonable one.
• In the case of mobility aids, the oppressive nature of the levy is evident.
• The tax places a prohibitive burden on the ability of disabled citizens to access the most basic goods, to lead lives with dignity.
• Given that the classification rests on a state of disability, it must be seen, on any sensible consideration of our equality jurisprudence, as, at least facially, inequitable.
• The onus must, therefore, rest on the government to show the Court that it had cogent reasons for treating these goods as distinct from other commodities that are exempt from tax.
• A failure to discharge this onus ought to render the levy illegitimate.
• The GST Council can take a leaf out of the books of Canada and Australia, and grant a complete exemption on the levy imposed on mobility aids.
• A fair and just regime ought to demand nothing less.
• Taxation, after all, is a tool that is intended to augment general welfare.
• It is time we recognised that an unreasonable levy can deeply compromise fundamental human needs.
• To free taxing statutes from the ramparts of the Constitution is to risk the entrenching of inequality.

https://www.thehindu.com/opinion/op-ed/market-dictates-and-a-blow-against-equality/article33043485.ece?homepage=true

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