SC stays HC order to cancel IGST on O2 devices as gifts

Finance ministry pointed out the order was an entrenchment on a policy issue under the government

The Supreme Court on Tuesday stayed a Delhi high court decision quashing a government notification to levy integrated Goods and Services Tax (IGST) on the oxygen concentrators imported as gifts for personal use.

A man arranges an oxygen cylinder inside a bus converted into a mobile centre for Covid-19 coronavirus patients in Kolkata. (AFP)

The finance ministry approached the apex court challenging the May 21 order of the Delhi high court, pointing out that the decision was an entrenchment on a policy issue lying within the domain of the executive.

Attorney general KK Venugopal, representing the Centre, told the court that on May 28, at the 43rd meeting of the GST Council, a decision was taken to constitute a Group of Ministers (GoM) to scrutinise the need for “further relief to Covid-19-related individual items immediately”, and its report will be submitted by June 8.

The bench of justices DY Chandrachud and MR Shah issued a notice on the Centre’s plea, and stayed the Delhi high court order, stating: “Arguable questions are raised.” The matter was adjourned for four weeks.

The high court noted that this was a “rare petition” where a tax statute was challenged for being violative of a citizen’s fundamental right to life under Article 21. The petitioner claimed that, by a separate notification issued on May 3, the government gave a GST waiver till June 30 for oxygen concentrators imported by state governments or via any entity, relief agency, or statutory body authorised by the state government, even as those imported as gifts for personal use were charged at 12%. Even concentrators imported for commercial purposes were taxed 12%.

A division bench of the high court struck down the May 1 notification, and said, “The courts and the state have to adopt a humanistic approach, which, in our view, is a facet of Article 21 of the Constitution. The failure to do so both, by the court and by the State, would lead to an unbridgeable chasm between law and justice, resulting in, disruption of social order.”