HC asks Delhi govt., GST Council to consider GST relief on purchased COVID imports

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Oxygen regulators attract an IGST of 5%, while cylinders and the rakes for carrying the regulators for them are liable to 18% IGST.

The Delhi High Court has urged the Centre to place before the GST Council, whose meeting is underway, the facts of a plea challenging the lack of GST exemption on imports of COVID-19 relief material purchased for donations to States.

The Delhi government has also been asked to inform the Court on May 28 whether it will consider granting refunds of GST paid on imports of such critical supplies on the lines of similar relief notified by the State governments of Gujarat and Haryana over the past month.

A two-judge bench of the HC Justices Rajiv Shakdher and Talwant Singh passed an order to this effect on Thursday in response to a petition by an NCR-based firm that imported oxygen cylinders and regulators and donated them to the Delhi government, but had to remit GST on these imports.

The petition has challenged the Centre’s exclusion of such imports from the ‘ad hoc’ GST exemption for COVID-19 relief material received from abroad. On May 3, the Ministry had exempted imported COVID relief material from IGST levies, provided it was received free and donated to State-approved entities for free distribution.

The Gujarat government had, on May 1, notified that the GST on critical COVID-19 imports will be reimbursed to domestic entities who are importing material for free donation in its jurisdiction. On May 17, the Haryana government announced a similar GST refund.

With no such notification from the Delhi government or the Centre to ensure uniformity in tax treatment, the petition has said that this defeats the purpose of ‘One Nation, One Tax’, listing the Finance Ministry, the GST Council and the Delhi government as respondents.

The Delhi government’s counsel will ‘revert with instructions as to whether it would be possible’ for them ‘to issue a notification, on the same lines, as has been done by the State of Haryana and State of Gujarat’, the court said in its order.

“Furthermore, we request the learned ASG (Additional Solicitor General), to place the facts of the instant case, before the GST Council. We recognise that the time is short, however, if an endeavour is made, it will help us dispose of this writ petition,” the Court said.

Arguing that there is ‘no intelligible’ difference between the firm’s efforts to import oxygen cylinders or any other ‘authorised person’ doing so, the petition stressed that ‘the benefit in both cases accrue to the government for helping common people’ and the conditions for getting the exemption are ‘arbitrary and onerous’.

“When oxygen supply is suddenly augmented, there is bound to be a shortage of containers, cannisters and cylinders to store the increased volumes of oxygen supplied to a particular State,” the petition pointed out, so States need to raise their stocks of oxygen cylinders and regulators.

Oxygen regulators attract an IGST of 5%, while cylinders and the rakes for carrying the regulators for them are liable to 18% IGST.

The GST Council, the petition argued, has failed to perform its Constitutional obligations which include recommending to the Union and States ‘any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster’.

Several States have sought GST exemption on all COVID-related supplies, including vaccines, and the issue is expected to be discussed at the ongoing GST Council meeting. Last week, the Delhi HC had struck down the GST levied on imports of oxygen concentrators for personal use as ‘unconstitutional’.


This article was originally published on The Hindu