Cos Seek IGST Waiver on import of Covid Goods

India Inc’s imports of oxygen concentrators and other medical supplies for Covid-19 relief or for distribution to their employees are not eligible for integrated goods and services tax waiver. This is because the exemption notification states that only goods imported free of cost are eligible for IGST waiver.

The industry has now reached out to the government, seeking full exemption from IGST on import of Covid-related goods by companies for use of their employees or for free distribution to governments or state bodies.
As part of its Covid relief measures, the Centre had on May 3 exempted IGST on relief material with a pre-condition that they are donated and imported free of cost. So, any corporate house importing any Covid-19 relief material for free distribution cannot avail the exemption.

Tax experts said the government should drop the “free of cost” pre-condition on the lines of countries such the United Kingdom that have provided exemption to such imports from customs as well as value-added tax.

“Government should consider bringing Indian importers who have purchased relief material from overseas and handed over to government agency for free distribution for Covid-19 relief purposes on the same pedestal as overseas exporters who are sending goods free of cost to India,” said Bipin Sapra, partner, tax and regulatory services, at Ernst & Young.

Pratik Jain, partner at Price Waterhouse & Co LLP, said, “Given the scarcity and situation on the ground, the government should consider complete exemption without any conditions as done by many other countries.”

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