India likely to waive customs duty on COVID-19 vaccine imports

The government is likely to waive 10 percent customs duty levied on imported vaccines in a bid to keep low the cost of overseas vaccines that are being eyed to supplement domestically-made shots ahead of opening COVID-19 vaccination to all citizens over 18 years of age, sources said.

While Russia's Sputnik V vaccines are due to arrive this month or latest by next month, manufacturers like Moderna and Johnson and Johnson have been urged to seek emergency use approval in India.

The government presently levies 10 percent customs or import duty plus a 16.5 percent I-GST and social welfare surcharge on vaccines coming from overseas. These taxes would make the imported vaccines costlier than the ones made by Serum Institute of India (SII) and Bharat Biotech.

"A customs duty wavier is being considered," a source aware of the matter said.

Another source said a decision is likely to be made "very soon."

As and when, foreign vaccine manufacturers approach the government with a formal proposal for allowing import of vaccine, the waiver would be given, government sources explained.

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No proposal has been made so far, finance ministry sources added.

The government earlier this month allowed the emergency use of imported vaccines to curb the spread of coronavirus infections. With 2.59 lakh new infections, the caseload has crossed 1.53 crore, making India the second-worst affected nation after the US, which has reported more than 3.1 crore infections. India's deaths from COVID-19 rose by a record 1,761 to over 1.8 lakh.

Sources said the discussion on duty exemption on vaccines started sometime in December last year when overseas manufacturers such as Pfizer sought approval to supply its vaccines to India.

The finance ministry and its indirect tax collection arm had done some preliminary calculations on the implications of a duty waiver but a decision was put off until the government approved the use of imported vaccines, they said.

The government, which on Monday allowed citizens over the age of 18 years to receive COVID-19 vaccinations from May 1, currently regulates the sale and purchase of all COVID-19 shots in the country.

Under the third phase of its vaccination strategy, manufacturers will be required to supply 50 percent of their monthly doses to the government and the rest to state governments or the open market.