SC to hear plea seeking GST exemption on COVID-19 related drugs, medical equipment

The intervention application has been filed by an NGO, 'Public Policy Advocates', in the pending suo motu case by the apex court on the distribution of essential supplies and services during the pandemic.

New Delhi: A plea has been filed in the Supreme Court seeking GST exemption for Remdesivir, Tocilizumab, Favipiravir and other COVID-19 related drugs with a similar generic constitution as well as medical equipment. 

The intervention application has been filed by an NGO, 'Public Policy Advocates', in the pending suo motu case by the apex court on the distribution of essential supplies and services during pandemic.

The application sought direction to the Centre to issue appropriate ad-hoc guidelines, orders or notifications "exempting COVID-19 related drugs including but not limited to Remdesivir, Tocilizumab, Favipiravir and other drugs with a similar generic constitution, medical equipment including but not limited to Ventilators and Bipap Machines, and other medical treatment..."

It also sought direction to the Goods and Services Tax (GST) council secretariat to convene a meeting expeditiously and direct exemption of GST with immediate effect on COVID related drugs and medical equipment which also include ventilators, medical-grade oxygen and oxygen concentrators. 

"That as the country grapples with an acute and devastating surge in cases with the second wave, an overnight demand for the aforesaid drugs and necessary medical equipment has exponentially increased manifold", the plea said. 

The NGO sought exemption of COVID-19 related drugs, medical equipment, other medical treatment for infection prevention, control measures and supportive care for patients from GST in accordance with provisions of the Central Goods and Services Tax Act, of the Integrated Goods and Services Tax Act, 2017 and the corresponding equivalent sections in the State legislations.

"It is pertinent to note that there has been no change in the status of COVID-19 since March 2020 and that it continues to remain a 'pandemic' disease. Additionally, with the onset of the double mutant virus variant which was first identified around March end of 2021, the rate of infection, the positivity rate, as well as the rate of hospitalization for those requiring critical treatment have all increased exponentially," the plea said. 

Giving the figures, it said that in 63 days cases have risen from 8,000 on February 2, 2021, to 1, 03,558 as of April 5, 2021, and in one day alone on April 26, over 3.2 lakhs cases of COVID-19 were reported and the number of deaths crossed over 2,000 over a period of seven days as per the official data released by the Government. 

"The number of infected persons in the country was estimated at 3.8 lakhs and numbers of deaths are reported to be about 3,645 as on April 28, 2021, being the highest single-day rise in the number of COVID-19 positive cases and the number of deaths recorded in India," the plea added. 

It said that the increase in cases brings with itself the inevitable financial burden on the families of the patients coupled with the inadequate and intermittent supply of such medical drugs and equipment which are deemed crucial for the purposes of treatment for COVID-19. 

The plea said that section 11 of the CGST Act confers the power of exemption from payment of GST on goods and services to the Goods and Services Tax Council (GST Council). It added that the All India Institute of Medical Sciences (AIIMS) and Indian Council for Medical Research (ICMR) have established a National Task Force and Joint Monitoring Group in view of the severe spiralling up of cases of COVID patients, and have identified three categories of patients who are afflicted with COVID-19.

"These three categories are identified as mild, moderate and severe disease as per Clinical Guidance of Adult COVID-19 patients dated April 21, 2021. According to these guidelines, cases of moderate and severe diseases require urgent hospitalization and have to be administered drugs to counteract the various adverse physiological effects caused by the Coronavirus," it said. 

It said that in both moderate and severe categories of cases and in specific circumstances, the use of Remdesivir, Tocilizumab, and Methylprednisolone have been prescribed by the National Task Force. 
"It is clear that the Act empowers the Central Government to exempt goods or services, or both, from the tax leviable thereon on the basis of the recommendations of the Goods and Services Tax Council/Respondent No. 2 if it is satisfied that it is necessary in the public interest," it said. 

The plea said the pandemic is a textbook situation when the exercise of the power of exemption is a public necessity as part of the commitment of the welfare state to raise the standards of public health, as part of its commitment in the Directive Principles of State Policy, and to preserve and protect the right to life of countless citizens who are suffering from moderate and severe COVID infections.

It said that the 42nd GST Council Meeting was held on October 5, 2020, that is after the use of an antiviral drug named Remdesivir was found to be a part of the uniformly acceptable part of the treatment protocol. 
"However, there have been no recommendations with respect to exemption of GST leviable on such drugs and their equivalent generic variants and medical grade oxygen," it said, adding that an exemption of 12 per cent cost of the product charged as GST which is otherwise leviable, would lead to a further decrease in the overall cost of the product, thereby making it significantly more affordable to the common public which is in dire need of this critical drug.

(With inputs from PTI)