Individuals will now have to to pay Integrated Goods and Services Tax (IGST) on Oxygen concentrators imported from abroad for personal use or as a gift.

This follows the Supreme Court decision to stay the Delhi High Court decision to quash the May 1 notification that prescribes IGST at the rate of 12 per cent on Oxygen concentrators imported for personal use. This rate will be applicable till June 30 and if not extended or exempted, the rate will be 28 per cent.

“Once the order is stayed, it will cease to apply right from the beginning till today (date of stay),” a senior Finance Ministry official told Businessline . All personal imports of concentrators whether as a gift or otherwise will attract IGST of 12 per cent as ‘on date and beyond’, he said.

On May 21, the Delhi High Court held that that imposition of IGST on oxygen concentrators which are imported by individuals and are received by them as gifts (free of cost) for personal use, is unconstitutional. The court had also quashed the May 1 circular. Following this, the Centre moved the Supreme Court. It submitted that the HC judgement trenches upon a pure issue of policy and said that the exemption which has been granted in respect of the concentrators that are imported by the State or its agencies falls in a clearly distinct classification.

The matter is now likely to be heard next by the Apex Court on July 2.

Petition before Bombay HC

Prateek Bansal, Associate Partner (Tax & Customs) at law firm White and Brief said that a petition challenging the levy of 12 per cent IGST on import of Oxygen Concentrators for personal use/gifts is also pending consideration before the Bombay High Court, where the Centre has been directed to file its reply. The next hearing is scheduled on June 7.

“It will be ideal if this issue is heard and decided expeditiously by the Supreme Court in order to avoid multiplicity of judicial proceedings, besides giving clarity to the importers with regard to tax positions to be adopted,” he said.

Currently, there are two questions —what will happen to the concentrators imported between May 21 and June 1 and what will happen in case the Supreme Court held exemption. The Finance Ministry official feels in case of a stay, IGST is to be levied from date of May 21. However, lawyers associated with the matter said that the imports between May 21 until June shouldn't be effected until the final disposal of the appeal of the Apex Court. They further said that if exemption is upheld, then individuals may need to apply for refund.

The fate of the whole issue will also depend on the Group of Ministers looking to scrutinise the need for exemption/concession from GST to Covid-19 relief materials including vaccine and concentrators. The group is to submit its report by June 8 post which the GST Council will take a final call.

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