The Supreme Court has issued a landmark order mandating the removal of all forms of tax on sanitary pads, a move expected to lower the cost of menstrual hygiene products across the country. The directive, issued on Wednesday by Justices Manoj Kumar Sharma and Mahesh Sharma Paudel, follows nearly four years of legal advocacy asserting that sanitary pads are essential health items, not luxury goods.

The case was initiated on August 12, 2021, by law students Shreena Nepal and Abhyudaya Bhetwal, who filed a writ petition demanding that the government eliminate customs duties and the 13% value-added tax (VAT) on both imported and domestically produced sanitary pads. The petition emphasised that such products should be classified under basic healthcare necessities.

The Supreme Court's recent order, issued on June 18, responds directly to those demands. Although the full text of the verdict is yet to be published, the petitioners have been informed that the court has ordered a blanket removal of all taxes related to sanitary pads. Shreena Nepal stated that once the complete ruling is available, it will confirm whether the decision aligns with their demand to exempt all types of taxes on both imported and locally manufactured products. She also urged the government to redirect previously collected tax revenue toward menstrual and reproductive health programs.

Currently, imported sanitary pads are subject to a 5% customs duty, while the raw materials used in local production face duties of up to 12%. Including VAT, total taxes on imported pads can reach 18%.

Dol Raj Adhikari, president of the Nepal Sanitary Pad and Diaper Manufacturers Association (NSPDMA), welcomed the court's decision but said clarity on its practical implications would only be possible once the official judgment is released.

Nepal’s sanitary pad industry comprises six large-scale manufacturers and over 20/25 smaller producers. However, these facilities are operating at only 30% of their total production capacity, according to Adhikari. Despite growing demand, Nepal remains heavily reliant on imports.

As of mid-June in the current fiscal year (FY) 2024/25, Nepal imported sanitary pads worth Rs 1.24 billion from 14 countries, including India, China, South Korea, and the Philippines, which collectively accounted for the largest share. India alone supplied Rs 902.8 million worth of sanitary pads. Meanwhile, Nepal’s exports of sanitary pads remain limited, with India being the sole consistent destination in recent years. The only other recorded export, a small shipment worth Rs 18,000, was made to Bangladesh in FY 2021/22.