Finance Ministry announces IGST reduction on import of O2 concentrators amid COVID crisis

Ministry of Finance has reduced the Integrated Goods and Services Tax (IGST) on the import of oxygen concentrators for personal use from 28 per cent to 12 per cent. The reduction will be applicable upto and inclusive of June 30, 2021.

Ministry of Finance vide a gazetted circular dated May 1, issued that the Central government deemed fit this reduction of IGST in the public interest. They have exempted oxygen concentrators that are imported for personal use from tariffs under the Customs Tariff Act, 1975 and Integrated Goods and Services Tax Act, 2017. 

Integrated tax is leviable on State import of oxygen concentrators as IGST is the tax collected on interstate transactions when the seller and the consumer are located in different States. Earlier, Finance Ministry had, in the wake of an unprecedented surge in COVID-19 infections and ordeals that stemmed out of it, waived off import duty on vital diagnostic kits and reagents used in COVID-19 related diagnosis for the coming 6 months. This was issued in the public interest according to the Ministry of Finance.

On April 30, the Ministry of Finance's Revenue Department vide a gazetted circular made amendments to their previous full exemption from basic customs duty and health cess on import of oxygen-related equipment. Then, the Centre had enrolled following composition and content to be free of customs duty. 

• Inflammatory Diagnostic (marker) kits, namely- IL6,
• D-Dimer,
• CRP (C- Reactive Protein),
• LDH (Lactate De-Hydrogenase),
• Ferritin,
• Pro Calcitonin and 
• Blood gas reagents

Earlier, basic customs duty was exempted on Remdesivir and its API (active pharmaceutical ingredient). It was suggested that the import of equipment related to providing oxygen to patients needs to be expedited. The Government of India has taken a lot of measures in the last few days to improve the supply of oxygen and medical supplies. 

Liberalised vaccine policy will commence on May 1 across States. The Centre had previously announced free food grains for 80 crore Indians for the month of May and June 2021. 

India on Saturday recorded another grim worthy figure of over 4 lakh fresh COVID-19 cases in a single day and nearly 3,500 deaths. The country reported more than 66 lakh COVID-19 cases in April 2021 alone.