Supreme Court stays Delhi HC order on oxygen concentrators

Now, IGST of 12% instead of 28% on concentrators purchased from abroad as gifts for personal consumption

Purchasing an oxygen concentrator from abroad will now attract an Integrated Goods and Services Tax (IGST) levy of 12% as opposed to 28%, following the Supreme Court stay on Tuesday of a Delhi High Court order on the issue.

Commercial imports of concentrators are also taxed at 12%. While imported concentrators received as a gift were tax-free following the HC order, Revenue Secretary Tarun Bajaj had said last Friday that the quashing of the relevant notification by the HC had increased the IGST rate to 28% for those purchasing concentrators from overseas for personal use.

Thus, three GST rates were applicable on imported oxygen concentrators for different categories of users, till the SC stayed the HC order.

“The stay by the Supreme Court on the decision of the Delhi HC that no IGST should be levied on the import of oxygen concentrators as gifts by individuals for personal consumption would imply that a 12% IGST will be levied on such import transactions until a final verdict is pronounced,” said Abhishek Jain, tax partner at EY.

A Group of Ministers (GoM) from the GST Council has been tasked with reviewing the tax treatment for such imports, along with possible tax exemptions on other essential COVID-19 supplies such as vaccines, drugs and oxygen cylinders.

“As such, the decision of the GoM becomes all the more important and the GoM can consider extending the benefit of IGST exemption to relief material imported by individuals for personal consumption,” Mr. Jain said.

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