IGST rate for commercial imports of oxygen concentrators reduced to 12%
The Ministry of Commerce and Industry has allowed import of oxygen concentrators for personal use through post, courier or e-commerce portals under the gift category. The exemption for oxygen concentrators is till 31 July 2021.
Import of goods, including those purchased from e-commerce portals, through post or courier, where Customs clearance is sought as gifts, is prohibited except for life saving drugs and medicines and Rakhi (but not gifts related to Rakhi).
Saurabh Kumar at SK Attorneys looks at the exemptions.
Rakhi (but not gifts related to Rakhi) will be covered under Section 25(6) of Customs Act. 1962 that reads ” no duly shall be collected if the amount of duty leviable is equal to or less than Rs.100/-.
Import of goods as gifts with payment of full applicable duties is allowed under drugs, medicines, oxygen concentrators and Rakhi (but not gifts related to Rakhi).
The exemption for oxygen concentrators is allowed only for a period till 31 July 2021 for personal use.
Para 2.25 of the Foreign Trade Policy, 2015-20 (FTP, 2015-20) is revised to include import of oxygen concentrators for personal use through post, courier or e-commerce portals in the list of exempted categories, where Customs clearance is sought as “gifts”, 31 July 2021.
An oxygen concentrator is a medical device that concentrates oxygen from ambient air. It is in high demand due to increasing COVID-19 cases in the country. These concentrators capture and filter the air, unlike oxygen cylinders which can only store a fixed amount of oxygen.
Therefore, amid rising demand for oxygen in the wake of surging Covid-19 cases, the Government through DGFT has allowed import of oxygen concentrators for personal use through post, courier or e-commerce portals under the gift category. The exemption for oxygen concentrators is allowed only for a period till July 31, 2021.As per the guidelines, gifts over Rs.1,000 attract Customs Duty and 28 per cent integrated GST.
Please note that import of Oxygen concentrators in India are chargeable to a Basic Customs Duty (BCD) of 10%, IGST @12%, topped up with applicable cesses. Exempting numerous COVID related relief materials, including Oxygen concentrators from levy of customs duty, would substantially lower the prices of these essential commodities with immediate effect.
“The government has included the import of Oxygen concentrators for personal use, through post, courier or e-commerce portals, in the list of exempted categories, where Customs clearance is sought as gifts,” the ministry said.
The Government in addition to exempted provided for Custom Duties, the Finance Ministry vide Notification No. 30/2021 dated 1 May 2021 reduces Goods and Service Tax (GST) as applicable for such imports in India by slashing GST on such importation of Oxygen Concentrator received as gifts or ordered online from 28% to 12%.
It is highlighted that though Customs Duty is exempt on such imports, integrated GST on oxygen concentrator is payable. The Integrated Good and Service Tax (IGST) rate for commercial imports of oxygen concentrators is 12%, but 28% if imported for personal use, the generic rate on goods imported for personal use, except drugs and medicines therefore the IGST rate will be lowered to 12% for oxygen concentrators imported for personal use till the end of June this year which would provide much-needed relief against the COVID fight.
Therefore, the IGST on Import of Oxygen Concentrators for personal use has been reduced from 28% to 12% to bring IGST rate on such personal imports at par with commercial imports of the same. Under the Goods and Services Tax (GST), the tax levied on consumption of goods or rendering of service is split 50:50 between the Centre and the state. On inter-state movement of goods as well as imports, an Integrated-GST or IGST is levied, which accrues to the Centre.
The amount paid as IGST can be utilised by businesses for claiming credit while making CGST or SGST payments at the time of actual sale.
This exemption shall be subject to the following conditions specified therein:
(i) State Government shall appoint a nodal authority in the State for the purpose of this exemption. As per section 2 (103) of the Central Goods and Services Tax Act, 2017, state include a Union territory with Legislature.
(ii) The Nodal authority so appointed shall authorise any entity, relief agency or statutory body, for free distribution of such Covid-relief material.
(iii) The said goods can be imported free of cost by a State Government or, any entity/relief agency/ statutory body, authorized in this regard for free distribution anywhere in India.
(iv) The importer shall before clearance of goods from Customs produce a certificate from the said nodal authorities that goods are meant for free distribution for Covid relief.
(v) After imports, the importer shall produce, to the Deputy or Assistant Commissioner of Customs at the port within a period of six months from the date of importation or within such extended period not exceeding nine months, a simple statement containing details of goods imported and distributed free of cost. This statement shall be certified by the said nodal authority of the State Government.
Such exemption order shall apply to all such consignments pending clearance from Customs as on date of issue of order, i.e., the May 2021.
Vide General Circular No. 09/2021 having E-file No. CSR-01/5/2021-CSR-MCA, dated 5 May 2021, The Ministry of Corporate Affairs has clarified that spending of CSR funds for COVID-19 is an eligible CSR activity.
Further, spending of CSR funds for ‘creating health infrastructure for Covid Care’, establishment of medical oxygen generation and storage plants’, manufacturing and supply of oxygen concentrators, ventilators, cylinders and other medical equipment for countering Covid-19 are eligible CSR activities under item nos. (i) and (xii) of Schedule VII of the Companies Act, 2013.
Other initiatives by the Government:
• Prioritized clearance of critical goods used for fighting COVID-19, such as medical equipment, drugs and pharmaceuticals, testing kits, PPEs, is ensured. Exemption from basic customs duty and health cess has been granted to such goods as ventilators, masks, personal protection equipment, testing kits and inputs used in manufacturing these items.
• Central Board of Indirect Taxes and Customs (CBIC) has set up dedicated helpdesk to handle queries related to Covid related Imports and handhold the trade, industry and individuals for expeditious customs clearance. The CBIC has also release an online form in order to provide expedited customs clearance to any Covid related medicaments or equipment. #health #GST #economy /fiinews.com
