Imposing IGST on Imported Oxygen Concentrators for Personal Use Unconstitutional: Delhi HC

The HC quashed the May 1 notification of the finance ministry that oxygen concentrators imported for personal use, irrespective of whether they are a gift or otherwise, will be charged with an IGST of 12%.

New Delhi: The Delhi high court on Friday declared as “unconstitutional the Centre’s decision to impose Integrated Goods and Services Tax (IGST) on oxygen concentrators which are imported by the individuals and said the COVID-19 pandemic is like a “George Floyd moment for the citizens of India” where the scarcity of oxygen, hospital beds and other medical equipment has brought out the best and worst in people.

This is a George Floyd moment for the citizens of this country. The refrain is ‘I can’t breathe’, albeit, in a somewhat different context and setting; although in circumstances, some would say, vastly more horrifying and ghastlier. Chased and riven by the merciless novel Coronavirus, the citizenry has been driven to desperation and despair, a bench of Justices Rajiv Shakdher and Talwant Singh said.

The death of George Floyd, an African-American man, had drawn widespread protests in the US last year after a video showed a police officer pushing him down and pressing his knee on the neck of the handcuffed victim who was heard saying “I can’t breathe”.

Also read: Everyone Is Funding Oxygen. This Is a Problem.

Dealing with the impact of second wave of the pandemic, the bench said scarcity of liquid medical oxygen, medicines, oxygen concentrators, hospital beds, ventilators, and other medical equipment, crucial for battling against the infection caused by the virus, has brought out the best and worst in people. We have messiahs. We have charlatans. We have hoarders.”

We have seen kind and caring hand being struck out by strangers when they could have remained cocooned in the safety of their houses. Brave hearts, there are many; doctors, nurses, and personnel manning public institutions. These are people who are at the forefront of this battle, staking their lives, so that the common man could live; beating this adversary, that is, the virus is their only goal. There is, thus, in this litigation, no adversary other than the virus, the bench said.

Asserting that oxygen concentrators are, in present times, placed at par with life-saving drugs and medicines, the bench said, “We hold imposition of IGST on oxygen concentrators which are imported by individuals and received as gifts (free of cost) for personal use, as unconstitutional,” and quashed the May 1 notification of the Ministry of Finance that oxygen concentrators imported for personal use, irrespective of whether they are a gift or otherwise, will be charged with an IGST of 12%.

Before May 1, an individual importer had to pay 28 per cent IGST for oxygen concentrator gifted to him for personal use.

To obviate misuse of oxygen concentrators, the court said the individuals will have to give an undertaking to the authorities that it is being imported for personal use and not commercial usage.

The court’s verdict came on a plea by 85-year-old Gurcharan Singh, who was suffering from COVID-19, challenging imposition of IGST on the import of oxygen concentrators as gift for personal use. He had said his nephew sent an oxygen concentrator for him as a gift from the US to ameliorate his condition.

It is important to remind ourselves that no respectable man would want to turn himself into a charity case. It is trite to state that if one aspires for a civilized society, then those who are obligated by law should pay their taxes.

“Likewise, the State should relent, or at least lessen the burden of exactions which take the form of taxes, duties, rates and cess, in the very least, in times of war, famine, floods, epidemics and pandemics since such an approach allows a person to live a life of dignity which is, a facet of Article 21 of the Constitution, the bench said.

The Centre claimed that it has on May 3 exempted completely, oxygen concentrators imported for the purpose of COVID relief from the imposition of IGST in cases, where the importer was the state government, any entity, relief agency or statutory body till June 30.

Also read: With Goa Toll, Hospital Oxygen Shortage Has Taken Lives of at Least 223 COVID Patients in India

The court said it is for this reason that it had observed since the government has come so far, it could go a little further and exempt even individual importers who had been supplied oxygen concentrators free of cost from bearing the burden of IGST.

There is, in our opinion, no justification whatsoever in excluding individuals from the purview of notification dated May 3 only on the ground that they received oxygen concentrators directly as gifts from their friends and/or relatives located outside the country, it said.

What is, to be borne in mind, is not the benefits the State has granted up until now. What is instead, required to be judicially reviewed is the action of the State, in not treating, even-handedly, persons, who ordinarily should fall in the same class users. The distinction, drawn, as noted above, is manifestly arbitrary, unreasonable, unfair and wholly unsustainable, it said.

The bench said it was of the view that a declaratory relief can be accorded, to the effect, that imposition of IGST on oxygen concentrators, imported as gifts, that is, free of cost, for personal use, is violative of Article 14 of the Constitution on the ground that an artificial, unfair and unreasonable distinction has been drawn between persons, who are similarly circumstanced as the petitioner and those who import oxygen concentrators through a canalizing agency.

It said those who have imported oxygen concentrators as gifts, for personal use, cannot be equated with those who import oxygen concentrators for commercial use.