Economy

India to Remove Custom Duty Charges on COVID-19 Vaccine Imports

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

Share

Recent Posts

Mutual Funds: SIP Inflows Breach Rs 19,000-Crore Mark for the First Time in February ’24

The systematic investment plan (SIP) contribution in February 2024 has crossed a new milestone. The monthly contribution tipped at Rs…

8 months ago

Income-Tax Return: A Brief Note on Annual Information Statement (AIS)

The Income-Tax (I-T) Department has directed taxpayers to access the Annual Information Statement (AIS) via the e-filing official portal and…

8 months ago

Mutual Funds: All About SIP and Market Fluctuations

Considering the vagaries of the stock market, investors often ponder over reevaluating their strategies. Whether to continue to remain invested…

8 months ago

Income-Tax Saving Through Strategic Life Insurance Planning

Financial planning is beyond just investing wisely to save on taxes; it's also related to protecting oneself and one's loved…

8 months ago

Income-Tax Return: Here’s a Note on Tax-Saving Avenues

A salaried individual earning up to Rs 5-15 lakh as net salary on an annual basis must first take stock…

8 months ago

A Quick Take on Equity-Linked Savings Scheme

Equity-linked savings schemes (ELSS), also referred to as tax-saving schemes, are equity funds that invest a significant portion of their…

8 months ago