The Union Finance Minister Nirmala Sitharaman through the Union Budget 2020 has proposed to levy health cess on the imports of medical devices.
The rate of Health Cess shall be 5%. However, the medical devices which are exempt from Basic Customs Duty (BCD) shall not be attracted to health cess.
The initiative has been taken to give a boost to the domestic industry and to generate resources for health services.
The finance minister said in the Union Budget presentation “Our policy of Make in India has started giving dividends. India is now making world-class goods and exporting such products. We have made considerable progress in medical equipment too. Till a few years back we were dependent on imports for medical equipment. Now, not only we are manufacturing medical equipment but also exporting them in large quantities. This sector deserves further fillip.
The government has also been committed to providing health services to all. Ayushman Bharat has made it possible. To achieve the twin objectives of giving impetus to the domestic industry and also to generate a resource for health services, I propose to impose a nominal health cess, by way of a duty of customs, on the imports of medical equipment keeping in view that these goods are now being made significantly in India. The proceeds from this cess shall be used for creating the infrastructure for health services in the aspirational districts.”
Moreover, the Finance Minister was also optimistic in her budget speech that the proposed scheme to encourage the manufacture of mobile phones and ships can be adapted for the manufacture of medical devices too with suitable modifications.
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