Dear Twinkle Khanna, I love you, but you are so, so wrong

Dear Twinkle Khanna

Firstly, I love you. You are a feisty woman who has found a new purpose to life. That is especially difficult for women who come from the field you started your career with. A misogyny riddled profession where women don’t get paid as much as men, and are more often than not, looked upon as objects that can move well to masala songs. A field where beyond a point, the only option left to women is to either bask in the reflected glory of her husband, or frequent Page 3 parties and talk about the ‘could have beens’. You on the other hand, have chosen to leverage your social capital to talk about causes you feel deeply about. That is admirable.

Unfortunately my dear, this time you are barking up the wrong tree, and in a spectacularly wrong fashion. I am of course referring to your now viral tweet, which I reproduce below:

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The issue of women using hygienic options such as sanitary pads, is indeed a noble cause. Of course I presume your enthusiasm on this issue is not solely linked to your husband’s impending movie on the same issue, and that this vigour will be seen well beyond the release of the said movie. But the issues you are tackling are grossly misplaced.

Firstly, the premise you answer to is in fact wrong. In India, Sildenafil Citrate, which is known as Viagra, is not tax free and is actually taxed at 12% GST. In a later tweet you have clarified that you were referring to Viagar in the USA and not in India.

While the clarification is welcome, it fails on two counts:

1. What relevance does the tax rate on a product in USA have with taxation of sanitary pads in India?

2. Since your initial tweet was misleading, it has gone viral and readers believe you are talking about the Indian situation itself. This misinformation can be damaging for none other than you, because you will (and are) being called out. Moreover, many media sites have also carried your tweet without your subsequent clarification, and you, my dear, don’t seem to have a problem with that. Your vocal, vociferous self hasn’t once asked the Media outlets to publish your clarification tweet as well. You ought to be more careful with your words.

Secondly, to the question: Why should sanitary pads even be taxed? The Government and many tax experts have clarified this, but maybe you did not read or understand it, so I have to repeat it (sometimes even voracious readers who can sit, sleep on, eat on, live on books, miss reading up before forming an opinion. Its okay. We are human).

A. If one is to take all the taxes, by the centre, the state and the embedded taxes in the Pre-GST era, Sanitary Napkins were already being taxed at around 13%.

B. A lot of adhesives and additional materials that are used in the manufacturing of Sanitary Napkins are taxed at 18% GST. Hence, many of the input items are taxed at 18% while the final item is taxed at 12%.

C. As of now, a manufacturer can set off the tax on purchase against the GST he is collecting on sales. If sanitary items are made tax free, then all these tax credits on purchases are lost and become a “cost”.  If these are treated as cost, then the final MRP of sanitary pads can actually rise, even though the rate of GST is 0%. A very simplistic example is as below:

As you can see, keeping all variables constant such as cost and profit percentage, and only by changing GST rate on pads, the MRP of pads actually increases by about 5%. The actual calculation could vary but I hope you get the crux: reducing GST rate does not mean reduction in MRP.

This, in tax parlance is called “inverted duty structure” where the GST rate on purchase is more than the GST rate on sales. This kind of taxation hurts the industry. Already, the fertilizer industry is reported to feel this pain, since their purchases are at 18% and sales are at 5%. Do you want the sanitary pads industry to also join them?

Next, I come to your answer to the question which was purportedly put to you on BBC News:

“Because policies are made by 65 year old men with erectile dysfunction”

While this comment is great for laughs and shares, it is utterly insensitive and even offensive to senior citizens and men at large who suffer from this medical condition. If a converse remark was made by a man, you and your friends would be ready to burn him at stake. Can you imagine one of these men responding to you by saying “Oh she’s a bitter and stupid 40 something failed actress who is facing premature menopause“? Would you take that comment lightly? I wouldn’t and you shouldn’t either. But maybe the difference is that I wouldn’t resort to making the kind of insulting remark you made, either.

Instead of the tax rate on pads, I suggest you focus on the Government’s scheme for distributing such pads all across India. Between 2012-15, a Central pilot scheme was run in 160 districts of India under which the Health Ministry procured and sold sanitary napkins. Eventually, patchy supplies and procurement issues sounded the death knell for the scheme. Further, the structure of the scheme came in for criticism from states who told the Centre that a menstrual hygiene scheme where the supply of sanitary napkins sometimes comes after a gap of three months is “self-defeating”.

This is where we need to focus. On rural India where lack of awareness or supply, or both, is forcing women to adopt unhygienic means during menstruation. The answer to this problem is not reducing tax rates or making distasteful, sexist remarks on senior citizens. To truly solve a problem, one has to get his or her hands dirty, like the character played by your husband does.

Regards

A fan

 


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