Import duties on raw materials for Covid test kits and APIs for Amphotericin B are being waived by the government.

The government has exempted basic on imports of specified API/ excipients for Amphotericin B and raw materials for manufacturing Covid test kits.

In a notification dated July 12, the Finance Ministry said the basic exemption on raw materials for manufacturing Covid test kits would be till September 30, 2021.

While the exemption on specified API (active pharmaceutical ingredients)/ excipients for Amphotericin B would be valid till August 31.

EY Tax Partner Abhishek Jain said this is a well thought exemption being granted by the Indian government to fight the Covid crisis and is a step to make the domestic industry self-reliant while fighting the pandemic.

Shardul Amarchand Mangaldas & Co Partner Rajat Bose said “this is likely to further bring down the cost of such items in India making it more affordable for the common man”.

Last month, the Finance Ministry’s Revenue Department had notified the lower rates for 18 Covid related supplies, like hand sanitiser, pulse oximeters, BiPAP machine, testing kits, ambulances and temperature check equipment. These concessional rates would be applicable till September 30, 2021.

GST on COVID-19 drug Tocilizumab and black fungus medicine Amphotericin B was reduced to ‘nil’, from 5 per cent.

The rate on Remdesivir and anti-coagulants like Heparin is lowered from 12 per cent to 5 per cent.

GST rate on ambulance was cut to 12 per cent from 28 per cent.

Tax on medical grade oxygen, oxygen concentrator (including personal imports), ventilators, BiPAP machines and high flow nasal cannula (HFNC) devices has been reduced to 5 per cent from 12 per cent.

Also, tax on Covid testing kits, pulse oximeter (including personal imports) has been brought down to 5 per cent from 12 per cent.

Hand sanitisers, temperature check equipment, gas/electric furnaces for crematoriums too will attract lower 5 per cent tax, from 18 per cent earlier.

Mahesh Jaising, Partner, Deloitte India, said that with the government preparing for a third wave of COVID which experts suggest to be around the corner, it is not surprising to see that the government has proactively exempted the customs duty on raw materials for COVID testing kits.

COVID test kits attract 5 per cent GST rate (till September 30 and this exemption will further reduce the cost for the manufacturers and therefore, the general public.

This is aligned to the government’s support for make in India. This is also aligned to the larger rate reduction/ exemptions that the Government announced in the past few months specifically for COVID related drugs and equipment, Jaising added.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Leave a Reply

Your email address will not be published. Required fields are marked *