Karnataka High Court issues notice to Govt. on a plea seeking GST, Royalty Exemptions For COVID-19 Vaccines

Karnataka High Court - GST - Royalty - Covid Vaccines - Taxscan

The Karnataka High Court issued the notice to the Union in a plea seeking GST, Royalty Exemptions For COVID-19 Vaccines.

The petitioner, Professor S. Chandrashekar, a former Indian Space Research Organisation (ISRO) employee, sought the directions from the government to ensure that adequate steps and facilities are in place to upscale the production, distribution and supply of vaccines and that no royalty, Goods and Services Tax or any other taxes shall be imposed on the vaccine’s manufacturers in India.

The petition said that the Government of India to also invoke the provisions of section 92 of the Patent Act read with Section 66. However, before doing so, the respondent should allow the various global manufacturers of the COVID-19 vaccine to voluntarily execute licences to manufacture COVID-19 vaccines in India. Also to constitute a rapid action task force to oversee the upscaling of the manufacturing of vaccines, the rapid inoculation of people and for regulating the price of the vaccines.

“The only way to protect our citizens, economy and security is for the Government of India to rapidly upscale the manufacturing of the vaccine and to inoculate the entire population without much delay. This can only happen if a number of other vaccine manufacturers in the country who have the capacity to produce vaccines are enabled to do so by the actions that the Government of India takes,” the plea claims.

The plea said that the Government of India should persuade all the pharma companies to give voluntary licenses for the manufacture at a reasonable cost considering the fact that India requires over a billion vaccines year after year, perhaps in perpetuity, which is a lucrative business offer.

The plea added, the royalty that the Indian manufacturers pay to the foreign or Indian pharmaceutical companies that have developed or are developing vaccines should be exempted from all kinds of taxes, at least for three years.

The division bench of Chief Justice Abhay Oka and Justice Aravind Kumar issued the notice and directed the Union to file their statement of objections and posted the matter for further hearing after three weeks.

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