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The unsavoury controversy of IGST exemption to the import of oxygen concentrators


For the past almost two years, Covid-19 Pandemic has gripped the world and the Indian Sub-Continent cannot be expected to remain immune to this life-threatening virus. In fact, the ‘second wave’ of this Pandemic has turned out to be much more lethal than the ‘first wave’! Particularly, the number of people who have succumbed to this virus due to the non-availability of oxygen is disturbingly high.

Amidst this crisis, the importance of “Oxygen Concentrator‟ as life-saving equipment has suddenly caught the attention of the entire nation! Admittedly, the country is not only facing a shortage of oxygen cylinders but also of oxygen concentrators and therefore, there is no alternative but to depend upon the imports of this equipment.

It is therefore not surprising that all eyes were on the Government’s tax policy, not only concerning the imports of lifesaving drugs but also of the lifesaving equipment like oxygen concentrators.

On April 24, 2021, Central Government issued notification no. 28/2021-Cus. granting full exemption from payment of customs duty and Health Cess to the oxygen concentrators imported into India. This notification shall remain in force till July 31, 2021.

However, at the same time, the imports of oxygen concentrators for personal use attracted IGST @ 28% as against its imports for commercial use that attracted the IGST @ 12%. Needless to say, this illogical and unjustified differential tax treatment led to wide-scale resentment and protests. Obviously, it was a sheer absurdity that a person who is desperately in the need of an oxygen concentrator and who somehow manages to arrange for one from abroad for his personal use would still end up coughing up 28% IGST on its import! Finally, sensing the growing discontentment amongst the people, the Central Government issued a notification no.30/2021-Cus on May 01, 2021, providing for a concessional rate of IGST at 12% on the oxygen concentrators imported for personal use. This was done ostensibly to bring parity between the import of this equipment for commercial use and personal use.

Related Topic:
Refund For Exports With Payment of IGST

Close on the heels of the above notification, the Central Government issued an Exemption Order no.04/2021-Customs dated May 3, 2021, inter alia, granting full exemption from payment of IGST to the oxygen concentrators, when imported into India, by the specified agencies, subject to the conditions specified in the Order.

Here, it is necessary to point that the aforesaid customs notifications and exemption Order have been issued by the Central Government under S.25(1) or S.25(2), as the case may be, of the Customs Act,1962 and the same are not based on any recommendations of the GST Council.

However, there was a furore against this irrational and controversial policy of granting total exemption from IGST when the oxygen concentrator is imported by the canalising agencies and levying 12% IGST thereon when imported by a person (read “patient‟) who is fighting for his survival and has somehow managed to arrange for one by way of gift! Peeved at this discriminatory tax treatment, a Delhi based octogenarian Mr Gurcharan Singh, who has been fighting Covid-19 battle having been affected by it, knocked the doors of the Delhi High Court and challenged the constitutionality of the levy of IGST @ 12% on the import of the subject equipment and received as a gift from his nephew for his treatment. On May 21, 2021, the High Court delivered its judgement and with piercing observations and concise but critical and profound analysis, declared the aforesaid customs notification no.30/2021Cus. as unconstitutional. However, as was expected, the judgement was immediately challenged by the Government and the Supreme Court has, on June 1, 2021, stayed the said judgement of the High Court.

Related Topic:
Basic Provisions of Customs Law and Taxability of Import of Goods

Whatever may be the ultimate judicial outcome of this dispute but isn’t it unfortunate that this controversy should arise in the first place? What is the rational and propriety in levying 12% IGST on the import of this life-saving equipment or device received from abroad by way of a gift for personal treatment? When the Government acknowledges the shortage of oxygen concentrators in the country, isn’t the levy of 12% IGST thereon when imported for personal use is like ‘rubbing salt into the wounds’? How can a person afford the levy of 12% IGST on import of this equipment which he may have either been lucky to get as a gift from abroad or has been able to get only after some herculean efforts? Isn’t this provision absolutely irrational, unjustified, inhuman and reflective of the bureaucratic mindset? No doubt, the grant of exemption from tax to any product lies within the full discretionary powers of the Central Government but isn’t the grant of exemption from IGST in this particular case in the ‘public interest’?

It may be noted here that that the power to grant exemption from IGST in respect of the import of the oxygen concentrator or any imported goods is vested in the Central Government under S. 25 of the Customs Act, 1962. The Central Government is neither dependent upon nor does it require the recommendation of the GST Council for exercising this power vested in it. As a matter of fact, if one were to closely and critically examine the relevant Constitutional provisions and the provisions of the IGST Act, 2017, the Customs Tariff Act, 1975 and the Customs Act,1962, then it would become clear that in the matter of the grant of exemption from any customs duty including IGST on the import of any goods, the GST Council has no role to play whatsoever nor any such role is envisaged by the lawmakers. One, therefore, fails to comprehend as to on what basis the GST Council is ‘deliberating’ the issue of grant of the IGST exemption to the Oxygen Concentrator, amongst other goods, and „constituting‟ the ‘Group of Ministers’ to look into this issue and make its recommendations?

And while this drama is being played out, ‘Gurcharan Singhs’ are screaming with pain from hospital beds: ‘We can’t breathe; give us oxygen concentrators!’


[The concluding comment of this article is inspired by the imaginary dialogue “I can’t breathe” written by Mr Vijay Kumar, Editor-in-Chief of Taxindiaonline.]

The unsavoury controversy of IGST exemption to the import of oxygen concentrators

Profile photo of Advocate Shailesh Sheth Advocate Shailesh Sheth

Qualifications:  B.Com.LLB Background:  Shailesh has over 30 years’ experience in Consulting, Advisory and Litigation practice in the field of Indirect Tax Laws that include Central Excise, Service Tax, Customs, State VAT Laws, CST & GST.  Shailesh is also one of the Partners in a legal firm, namely, M/s. RVS LEGAL having its base in Chennai, Bangalore and Mumbai. Mr. V. Raghuraman, Advocate, Bangalore and Mr. K. Vaitheeswaran, Advocate, Chennai are two other Partners in the firm. This boutique firm specialises in Indirect Taxation, Direct Tax, International Taxation, Arbitration, Corporate Laws (including IBC), Drafting/Vetting of Commercial Contracts, amongst other fields. Representative Industry Experience:  Shailesh has dealt extensively in the areas of Central Excise, Service Tax, Customs, GST and CST/VAT across the entire trade and industry spectrum consisting of Manufacturing, Service Sector and Distributive Trade representing diverse sectors Public Profile:  Shailesh has been a regular faculty at various professional bodies as well as Trade and Industry Forums on his chosen field. He has already delivered more than 90 lectures since April, 2017 on various aspects of GST all over India.  Shailesh is a regular columnist in ‘Vyapar’- a Bi-weekly Business Newspaper of Janmabhoomi Group – on Service Tax, Central Excise & GST and has also contributed number of articles to various magazines as well as Taxation Websites like TIOL, etc. Membership/Association with professional/trade/industry bodies: Besides professional bodies like Chamber of Tax Consultants and AIFTP, Shailesh is also associated with various trade/industry bodies including Indian Merchants’ Chamber (Indirect Tax Committee), ITAMMA, IDMA, AIRIA, BSE Brokers’ Forum, Builders Association of India (BAI), NAREDCO, Brihanmumbai Developers Association (BDA) & other bodies guiding them in the field of Indirect Tax.

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