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COVID-19: As govt cuts GST, a look at duties on certain imported items, more clarity awaited on others

While drugs like Remdesivir, Tocilizumab, Favipiravir and others are exempt from customs duties as well as IGST, there is still no clarity on the GST they would attract when manufactured in India.

May 03, 2021 / 08:11 PM IST

As India faces a shortage of medical-grade oxygen, hospital beds, and life-saving medicines like Remdesivir, there have been calls from various quarters to reduce the taxes on these items, whether produced domestically or imported.

Some states have even called for an emergency meeting of the Goods and Services Tax (GST) Council to review the GST applicable on medical equipment, devices and drugs. Moneycontrol takes a look at the situation.

Oxygen cylinders, concentrators: Like everything else in India, the tax structure on medical-grade oxygen and the devices used to carry and use it is complicated. Medical-grade oxygen itself attracts a GST of 12 percent. A recent plea filed with the Supreme Court seeks the lifting of GST on medicines like Remdesivir, Tocilizumab, Favipiravir, and also requests the government to exempt oxygen from GST through the apex court.

Oxygen concentrators for personal use were attracting a GST of 28 percent, which is in the highest bracket. However, late last week, the Centre announced that the GST on oxygen concentrators for personal use would be slashed to 12 percent.

Last week, the Centre also exempted the import of oxygen concentrators, cylinders, etc., from customs duties. On May 3, these items were exempted from integrated GST (IGST) as well.


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Ambulances: The cost of an ambulance is Rs 7 lakh-Rs 50 lakh, depending on the make and size of the vehicle, and the amount of medical equipment it carries. A vehicle, fitted as an ambulance, attracts a GST rate of 28 percent. Here, GST is applicable while buying an ambulance, but there is no GST on ambulance services.

Ventilators: Ventilators and artificial respiration devices are charged a GST of 12 percent. Since the first wave of COVID-19, there have been calls for either reducing the GST on ventilators or exempting it altogether. It is not done yet. Imported ventilators are now exempt from import duties as well as IGST.

Crucial drugs: Though drugs like Remdesivir, Tocilizumab, Favipiravir and others are now exempt from customs duties as well as IGST, there is still no clarity on the GST they would attract when manufactured in India.

It is in this backdrop that states have been seeking an emergency meeting of the GST Council, which has not met for the past six months. They are demanding an exemption on some of the key items mentioned above.

For example, according to Business Standard, amidst the shortage of Remdesivir across the country, Chhattisgarh has placed an order for 90,000 Remdesivir injections, worth Rs 14.11 crore, with pharma major Mylan Laboratories.

“We have placed the order with Mylan for 90,000 injections at the rate of Rs 1,400-plus-12 percent GST. Around 2,000 injections will come in two days and another 28,000 within a week, which makes it 30,000 a week” TS Singh Deo, the state’s health minister, was quoted as saying by the newspaper.
Arup Roychoudhury
first published: May 3, 2021 08:06 pm

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