Delhi HC directs 5% IGST rate on Dialysis Machine Imports

Fresenius Medical Care India Private Limited Vs Union Of India & Ors (Delhi High Court)

In a recent ruling, the Delhi High Court addressed the issue of Integrated Goods and Services Tax (IGST) rates on the import of dialysis machines by Fresenius Medical Care India Private Limited (FMC India).

The petitioner, FMC India, sought clarification from the court regarding the applicable IGST rate for the import of dialysis machines under HSN code 90189031. They argued for a 5% rate, citing an office memorandum dated 13.10.2023.

During the proceedings, the respondents, represented by learned counsel, acknowledged that dialysis machines falling under the aforementioned HSN code are indeed subject to a 5% IGST rate, as per a notification issued on 13.10.2023. Furthermore, they clarified that this rate also applies to items such as “Artificial Kidney” and “Disposable sterilized dialyzer.”

The court, after considering the submissions from both parties, disposed of the petition, accepting the respondent’s statement. Consequently, FMC India can now import dialysis machines at a 5% IGST rate, subject to verification of the HSN code.

This decision by the Delhi High Court carries significant implications for FMC India, as it provides clarity on the applicable tax rate for their imports. It not only resolves the immediate concern raised by the petitioner but also sets a precedent for similar cases in the future.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. Petitioner seeks a direction to the respondents to clarify that the Integrated Goods and Services Tax [“IGST”] rate applicable to the petitioner for import of dialysis machines is 5% as per HSN code 90189031 in terms of office memorandum dated 13.10.2023.

2. Learned counsel for respondents submits that he has taken instructions and submits that dialysis machines covered under HSN code 90189031 are liable to be taxed at 5% in terms of notification dated 13.10.2023. He further submits that IGST rate of 5% is also applicable for “Artificial Kidney” and “Disposable sterilized dialyzer” (serial No. 254-55 respectively).

3. He submits that insofar as case of petitioner is concerned, subject to verification of HSN code, the same would be exigible to tax at 5% in terms of said notification.

4. Petition is accordingly disposed of binding the respondents to their statement.