COVID-19 surge: Customs duty, GST proving to be a hurdle for Bengaluru organisations receiving aid from abroad

Image used for representation purpose   | Photo Credit: REUTERS

Shilpa Govardhan, a doctor of Indian origin in the United States helped raise $2,500, which was used to purchase 150 pulse oximeters and 150 thermometers to be donated to organisations in Bengaluru. The shipment via courier arrived in the city on May 7, but it has been stuck with Customs since.

In Bengaluru, volunteer Ravindra Vijay, who is coordinating with officials here to receive the care package, said the consignment would be released only if Customs duty amounting to ₹1.2 lakh was paid. “The pulse oximeters and thermometers are not for any commercial purpose; it is for COVID-19 management and meant for patients belonging to lower socio-economic groups,” he stated.

On April 24, 2021, the Ministry of Revenue, Government of India, exempted Customs duty on medical equipment related to oxygen generation, such as oxygen concentrator (including flow meter, regulators, connectors, tubings), oxygen generators, etc. This exemption will be in force till July 31, 2021. However, it does not include supplies like thermometers that Dr. Govardhan had sent. etc.

According to sources in the Central Board of Indirect Taxes and Customs here, last year, the government had announced a much broader exemption on import of items for medical aid and COVID-19 management. However, this exemption expired last September/October.

It is not just organisations receiving aid that are complaining of delayed deliveries of much-needed supplies required to manage COVID-19. People and NGOs purchasing supplies from abroad are also mired in red tape.

GST hurdles

And while the Centre may have waived Customs duty, Goods and Services Tax (GST) is proving to be another hurdle.

Ali Mohammed Sharieff, who runs Lifeline Foundation and is part of Mercy Mission, received Corporate Social Responsibility (CSR) funds for the procurement of oxygen concentrators. The foundation found a supplier in Singapore and transferred the money through an agent. While the foundation did not have to pay Customs duty for the consignment, the GST could not be waived. The consignment was released only after the foundation paid the requisite GST, he said.

Rajendra Prasad, an oxygen supplier in Bengaluru and Mandya, said the Centre should waive GST for essential medical equipment used in COVID-19 management. “We have to pay 12% GST, which only increases the price for the end user. If GST is waived, then the price of oxygen generators, concentrators and other medical equipment that is in great demand during the pandemic will reduce for the end user,” he pointed out.

Influx of aid

Customs officials acknowledged the volume of aid coming into Bengaluru. According to data between April 25 and May 16, over 11,000 oxygen concentrators, 1,500 ventilators, 2,200 humidifiers, 1.5 lakh pulse oximeters, 90 lakh gloves, 70 lakh masks and over 500 oxygen cylinders had been cleared by Customs officials in the city.

To speed up the process, the State government on May 3 appointed nodal officers who can issue authorisation certificates for the free of cost import of COVID-19 relief items. Uma Mahadevan, principal secretary, Rural Development and Panchayat Raj — one of the nodal officers — said that from the second week of May, applications for authorisation certificates were being scrutinised and cleared. “The process is completely online, where the importer will have to submit an application with the requisite documents. We are working even during weekends to clear as many applications as possible,” she said.

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Printable version | Jun 18, 2021 6:17:52 AM |

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