Lowering import duty to bring down vax price

The unprecedented surge in Covid-19 cases across the country and complaints of shortage of medicines and vaccines to cope with the infections have forced the government to alter some policies.
 
Last week, the Centre prohibited the exports of Remdesivir injection and Remdesivir active pharmaceutical ingredients (API).
 
The transitional arrangements at Para 1.05 of the Foreign Trade Policy allows exports against letters of credit established before any restriction comes into effect. However, this relaxation is not available for the export of Remdesivir injections or Remdesivir API.
 

The government also gave approval to Russian Sputnik vaccine for emergency use and said it will fast track the approval process for more foreign vaccines (e.g. Pfizer, Johnson and Johnson, Moderna etc.). These that have already been approved by the regulators in developed countries and/or listed by the Word Health Organization for emergency use. The idea is to help augment the supply of vaccines in the country in due course. Some of these will be manufactured in India but that will take some time. The imports may start soon after approval by entities that already have good enough distribution networks. Some may prefer to import the vaccines in bulk and fill these in smaller doses at various locations.

 
The Covid-19 vaccines are freely importable under the classification 30022019 against the description ‘other single vaccines’. The tariff rate of basic customs duty against this entry is 10 per cent and the integrated tax is 5 per cent.  This brings the aggregate import duty on this item to 16.55 per cent. The finance ministry should bring down the import duty on Covid-19 vaccines so as to make them less expensive for the people at large.
 
Meanwhile, a new ‘Trade Facilitation’ mobile app has also been launched to enable easier access to various services of the Director General of Foreign Trade (DGFT). Last July, the DGFT had disenabled the facility of filing applications for duty credit scrips under the Merchandise Exports from India Scheme (MEIS) for exports made in 2019-20 and 2020-21. Now, the DGFT portal is open for filing the MEIS applications for exports made in 2019-20. The cut in entitlements for filing the applications beyond the stipulated date has been waived for applications filed till September-end this year.  The applications for closure of advance authorisations along with the stipulated documents should henceforth be submitted online at the DGFT portal. The Central Board of Indirect Taxes and Customs (CBIC) has notified the Customs (Verification of Identity and Compliance) Regulations, 2021. It will come into force on the date to be notified.

 
The Customs has a critical role in facilitating the cross-border movement of the vaccines. Our Customs administrators should take note of the resolution of the Customs Co-operation Council detailing steps to be taken for speedy clearance of vaccines and instruct the field formations accordingly.
 
Our logistics service providers should take note of the new guidance note issued by the International Air Transport Association (IATA) for vaccine and pharmaceutical logistics and distribution. It is a set of considerations and awareness for large scale handling, transport and distribution of vaccines, pharmaceutical, life science and medical products.
 
Considering the gravity of the situation, the government should get various ministries and departments to work closely to ensure that Covid-19 vaccines and medicines are easily available through administrative and private channels quickly.

 
Email : tncrajagopalan@gmail.com