The official said the government has an open mind on removing IGST on such a gift, but the final call rested with the GST Council.
The decision to challenge the high court’s verdict has been taken as the notification providing for the reduced levy stands quashed, thereby implying that all imports would face the higher IGST rate of 28% and legal issues thrown up by the judgement, said the official, who did not wish to be identified.
“Judgement is being examined… There is legal merit in appeal,” the official said, adding that the finance ministry is open to complete duty exemption on such imported gifts.
A proposal to this effect, as suggested by various industry bodies, will be taken by the GST Council, which is the key decision-making body for the indirect tax.
In fact, the government would move the high court even if the GST council provides an exemption because of the precedent this verdict would set in respect to certain key issues, said the official.
Last Friday, the Delhi High Court had held the levy of IGST on oxygen concentrators imported by individuals as gifts unconstitutional and quashed the notification issued by the government on May 1, which had reduced the IGST rate to 12% from 28% till June 30 on such imports.
The official also highlighted reliance placed on Article 21 of the Constitution, which could create future issues in respect to any tax proposal. Article 21 guarantees the right to life to citizens.