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The key concessions available to importers

The Centre last month waived basic customs duty and agriculture cess on a host of items, including medical oxygen, oxygen generators and concentrators, ventilators, and cryogenic transport tanks. It also reduced the integrated goods and services tax (IGST) on imported oxygen concentrators meant for personal use from 28% to 12% for a limited period. Waiver of duty and IGST for certain diagnostic kits and reagents has also been announced for a limited period. A lot of the import-related paperwork has been reduced and officials have been asked to treat import of medical supplies with high priority.

Concessions for foreign donations

Besides customs duty relief, medical supplies received as donations from abroad for free distribution are exempt from IGST. IGST on imports is the equivalent of GST on locally produced goods. This ensures the importing agency does not have to pay any indirect tax on the supply. This benefit is available to supplies like covid-19 vaccines, oxygen and related equipment, anti-viral drug remdesivir, and diagnostic kits. These benefits are important given that international relief consignments including from the US, UK, Russia and the EU are coming to India amid a desperate need for medical supplies.

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Why was relaxing import procedures vital?

India’s customs procedures have in the past been flagged by the World Bank in its ease of doing reports as an area that needs improvement. The issue got greater attention during the first wave of covid-19 last year when many customs procedures were made paperless to avoid physical contact. The magnitude of the second wave prompted further simplification.

What is the approach to clearing imports?

Prime Minister Narendra Modi told the revenue department to ensure “seamless and quick custom clearance" of imported equipment. Accordingly, senior nodal officers have been deployed in 20 locations to assist importers and to ensure customs clearance is done throughout the day. Imports facilitated by the external affairs ministry and imports by the Indian Red Cross society are cleared on priority. The idea is to ensure covid-related imported material and equipment reach the intended beneficiaries in the shortest time.

What should importers know?

The Central Board of Indirect Taxes and Customs has set up a dedicated cell to support all importers and has offered an online form to seek details of imports. Contact details of zonal officers are published so that importing agencies can reach out to them for support. Reaching out to the authorities through these means is expected to help in quick clearance of medical supplies. Labelling norms have also been eased for quick processing of shipments.

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