Currently, the government charges a 10% customs duty plus a 16.5% IGST and social welfare surcharge on imported vaccines. Due to these taxes, imported vaccines are becoming costlier than those made by Bharat Biotech and Serum Institute of India (SII).
Amidst the sudden surge in COVID-10 cases, India might soon announce a 10% customs duty waiver on imported COVID-19 vaccines. The aim is to reduce the cost of the imported vaccines that are being looked at for supplementing domestically made vaccines ahead of opening the COVID-19 vaccination drive for all citizens above 18 years of age.
Earlier this month, the government permitted imported vaccines to curb the rapid spread of COVID-19 infections. India has now become the second-worst affected nation after the United States. With around 2.59 lakh new cases, the total number of cases has crossed 1.53 crore in India; the US has reported more than 3.1 crore infections. The death toll in India due to COVID-19 has increased from 1,761 to over 1.8 lakh.
As per sources, a discussion around custom duty exemption concerning vaccines was initiated somewhere in December 2020 when overseas manufacturers sought approval for supplying their vaccines to India.
Along with the indirect tax collection arm, the Finance Ministry did preliminary calculations concerning the implications of a customs duty waiver. However, the decision was called off until the government gave their consent for using imported vaccines. Currently, the sale and purchase of all COVID shots within the country are regulated by the government. As per the third phase of the vaccination strategy, manufacturers will need to supply 50% of their monthly doses to the government; the rest of the supply will either go to the state governments or the open market.
For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in
Bhavana is a Senior Content Writer handling the GST vertical. She is committed, professional, and has a flair for writing. When away from work, she enjoys watching movies and playing with her son. One thing she can’t resist is SHOPPING! Her favourite quote is: “Luck is what happens when preparation meets opportunity”.
