Division Bench quashes Finance Ministry notification issued on May 1
The Delhi High Court, on Friday, held that the imposition of Integrated Goods & Service Tax (IGST) on imported oxygen concentrators by individuals for personal use as ‘unconstitutional.’
First, exemption will be available only for imports by agencies approved by a nodal authority, appointed by the State Government. Second, import by State Governments will also be free of cost. This means import even as gift by individual for personal use will attract GST at the rate of 12 per cent.
Gift for personal use
The Division Bench comprising Justices Rajiv Shakdher and Talwant Singh disposed a plea filed by 85-year-old Gurcharan Singh, which challenged imposition of IGST on the import of oxygen concentrators as gift for personal use. The Bench said that individuals will have to give an undertaking to the authorities that the oxygen concentrator is being imported for personal use and not for commercial use.
Earlier, the Bench had directed that the oxygen concentrator being imported by the 85-year-old petitioner be released by the Customs authorities, subject to his depositing with the court an amount equivalent to the IGST payable.
On Friday, it directed that the money be released to the man with accrued interest.
The plea said the May 1 notification was violative of Articles 14 and 21 of the Constitution, since the same is arbitrary and infringes the right to life of patients reeling under the pandemic.
It said the notification unconstitutionally mandates that the petitioner and other similarly placed Indian citizens pay IGST on something as crucial as oxygen concentrator, which is been gifted to them, specifically for their personal use under the present circumstances, where there is a nationwide crisis owing to the unavailability of oxygen concentrators and similar medical equipment.
May 5 interim order
On May 5, it passed an interim order saying the said writ petition represents one of those rare writ actions, whereby a notification issued in the realm of a tax statute has been, inter alia, assailed under Article 21 of the Constitution.
That tax is an exaction by the State is well-known. That its levy and collection, ordinarily, does not encompass equity, is also well-known. But presently, “we are living in difficult times and, therefore, perhaps, the petitioner has invoked Article 21 of the Constitution”, said the Bench.
The Bench noted a submission by the government saying that exemption from IGST on oxygen concentrator will be available if imported by certain notified agencies only. “We are of the view that since the respondent has gone this far, it could move further and extend the exemption to even individuals, to enable them to obtain imported oxygen concentrators by way of a gift, albeit, without having to pay IGST,” the Bench had said.
A similar matter has been filed in Bombay High Court, which issued notice to Union Government and GST Council.