Non-FCRA listed NGOs may have to pay tax on foreign oxygen device gifts

Indian non-profit organisations and individuals getting oxygen concentrators as gifts from overseas may end up paying goods and services tax and customs duty on them even though the government has offered relief on the devices, which are in short supply during the ongoing second Covid-19 wave.

The government has waived integrated GST and customs duty on oxygen concentrators that are gifted from overseas or imported. However, experts said many companies and non-profit organisations without an FCRA licence may still be liable to pay these taxes.

The Foreign Contribution (Regulation) Act is triggered in the case of non-profit institutions, experts said. Only non-profit entities with a valid FCRA registration can legally receive charitable funds and articles from donors outside India.

“While the government has announced that there would be no GST or customs duty on imported oxygen concentrators, this could still be an issue under FCRA,” said Amit Maheshwari, tax partner at AKM Global, a tax consulting firm. “For any non-profit entities not having an FCRA licence or for profit entities receiving these equipment as gifts, there could be questions later on under FCRA. We hope the government would come out with a clarification in this regard.”

Even certain individuals who import oxygen concentrators could face taxes.

“There is no intelligible differential for different rates when oxygen concentrators are imported by individuals and other statutory bodies/relief agencies. The exemption eligibility and the periodicity need to be tested by way of a judicial review,” said Abhishek A Rastogi, a partner at Khaitan, a law firm.

The government first slashed iGST on oxygen concentrators to 12% from 28% for personal use. This was later reduced to nil following a public outcry.

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