The GST Council, it its upcoming meeting on May 28, is likely to take a call on levy of 12% tax on import of oxygen concentrators for personal use. Last week, the Delhi High Court said that imposition of 12% Integrated GST (IGST) on oxygen concentrators for personal use or those received as gifts is “unconstitutional”.
This came after a plea was filed by an 85-year-old COVID patient whose relative had sent a oxygen concentrator from the United States. The court quashed a May 1 notification of the Finance Ministry which said that a 12% IGST will be levied on oxygen concentrators imported for personal use or gift.
Tax experts said the Council may decide to exempt IGST on such ismports as the revenue implications would not be much. Abhishek Jain, Tax Partner, EY, said the government had already provided exemption from IGST on free import of oxygen concentrators for COVID relief by any state government or any agency authorized by the state government.
“The Delhi High Court has beneficially extended the benefit of this IGST exemption to personal import as gifts for individual use as well,” he said. “Given the enormity of the pandemic situation and as a life saving measure and given that the revenue loss for the government may not be significant, the government may consider accepting the judgement and extending the benefit.”
Rajat Mohan, AMRG & Associates Senior Partner, said collecting tariffs on medical equipment, medicines and vaccines, scarcity of which is leading to the death of millions, is against the nation’s fundamental principles. “Lowering prices for COVID related material is needed and neutralizing tax on all such imports is one such effective method that would have an immediate trickle-down effect on the entire supply chain.”
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In the upcoming meeting, the Council is also likely to discuss tax rate cuts on COVID essentials and compensation shortfall of states. The Centre had earlier ruled out exempting COVID vaccines, medicines and oxygen concentrators from levy of GST saying such an exemption will make the lifesaving items costlier for consumers as manufacturers will not be able to offset the taxes paid on inputs.
Domestic supplies and commercial imports of vaccines, currently, attract a 5% GST, while COVID drugs and oxygen concentrators attract a 12% levy. On May 1, the government had slashed IGST rate to 12%, from 28%, for import of concentrators for personal use. The reduced rate would be applicable up to June 30.
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