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The Hon’ble Delhi High Court in Gurcharan Singh v. Union of India & Ors. [W.P. (C) 5149/2021, dated May 21, 2021] quashed the notification imposing Integrated Goods and Services Tax (“IGST”) on oxygen concentrators which are imported by individuals and are received by them as gifts i.e. free of cost for personal use, without a government agency. Held that, an artificial, unfair and unreasonable distinction has been drawn between persons, who import oxygen concentrators through a canalizing agency and those who obtain imported oxygen concentrators as gifts, for personal use. Such imposition of IGST is violative of Article 14 of the Constitution and is unconstitutional.
Facts:
Gurcharan Singh (“the Petitioner”) is 85 years old COVID patient, has filed this petition against the imposition of IGST on the import of the oxygen concentrator which has been gifted to the Petitioner for personal use, by his nephew, who is located in New York, U.S.A.
The Ministry of Finance (“the Respondent”) issued Notification no. 4/2015-2020, dated April, 30, 2021, by DGFT, which amended para 2.25 of its Foreign Trade Policy, 2015-2020 ("FTP") to permit import of oxygen concentrators that resulted in exemption from Basic Custom Duty on such items vide Notification No. 28/2021-Customs dated April 24, 2021. Afterwards, the Notification No. 30/2021-Customs, dated May 1, 2021 (“Impugned Notification”), was issued whereby, IGST on oxygen concentrators imported by individuals for personal use, that are supplied free of cost, was scaled down to 12% from 28%.
However, another notification, i.e., Ad hoc Exemption Order No. 4/2021-Customs, dated May 3, 2021 (“Exemption Order”), was issued, which exempted IGST on oxygen concentrators imported for the purpose of COVID relief, subject to certain conditions that included, where the importer is the State Government or, any entity, relief agency or statutory body, authorised in this regard by any State Government (“canalising agency”) till June 30, 2021, that stood in contrast to oxygen concentrators which were imported for commercial use.
The Petitioner, has asserted that the imposition of tax is discriminatory, unfair, and unreasonable and impinges upon the Petitioner’s right to life and health.
Issues:
Held:
The Hon’ble Delhi High Court in W.P. (C) 5149/2021, dated May 21, 2021 held as under:
DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.
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