The Delhi high court has directed a medical equipment importer to cap at ₹400 the price of each COVID 19 Rapid Test Kit, which was ordered by the Indian Council of Medical Research (ICMR) at the rate of ₹600 per kit.
In late March, the Indian Council of Medical Research (ICMR) placed an order for five lakh WONDFO SARS CoV-2 Antibody tests from China at the rate of ₹600/- per kit. The total order value was around ₹30 crores.
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However, the landed cost of each test kit works out to ₹245. Which meant that the actual cost for 5 lakh tests kits was ₹12.25 crore.
The high court noted that from the ₹30 crores to be paid by ICMR for the 5 lakh kits/tests, ₹18.75 crore was to be shared by the intermediaries - Matrix Labs, Rare Metabolics Life Sciences and Aark Pharmaceuticals.
"The respondent (Matrix Labs) is to supply these goods to petitioner no.2 (Aark Pharmaceuticals) for ₹.20 crores plus 5% GST = ₹.21 crores, at an apparent 45% profit of ₹.7.75 crores," the high court said.
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"Petitioner no. 2 is to receive an amount of ₹. 30 crores plus GST from the ICMR, for a similar evident profit of ₹.9 crores despite no value addition to the imported medical material," it remarked.
The first consignment of 2.76 lakh tests was delivered to ICMR on April 17 2020, for which invoice has been raised but the payment is awaited.
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Directing that the test kits must not be sold rate of ₹ 400 per piece, the high court said, "a profit mark-up of ₹. 155/- i.e 61% on the landed cost price of ₹. 245/- is much on the higher side and in any case more than sufficient for the seller, for the kits/tests to be made available in India for urgent extensive tests through the country...".
The issue came to light when Rare Metabolics Life Sciences and Aark Pharmaceuticals took Matrix Labs to the high court over payment of the consignment money.