Government To Soon Exempt Customs Duty On Life-Saving Drugs, Specialised Food? What We Know

The central government, in the past, made a significant announcement concerning rare diseases. They released an official notification to eliminate customs duty on medications and certain specialised food products utilised in the treatment of these conditions. Additionally, the government also waived basic customs duty on medicines and medical equipment used for treating cancer and heart diseases. As per the order of the government, a detailed list of these rare diseases is included under the National Rare Disease Policy 2021.

Following a recent directive of the Central Government, to prevent customs officers from raising questions and also to enhance the efficiency in assessment and facilitation, additional advantages concerning import and export will be provided under specific customs tax chapters. These measures are scheduled to be implemented from June 1. Stakeholders have the right to express their opinions until May 26, on the suggested modifications regarding import-export disclosures of medical products.

The Directorate General of Foreign Trade, the Ministry of Chemicals and Fertilizers, and the Ministry of AYUSH have collaboratively constructed the framework for these changes. According to the Central Board of Indirect Taxes and Customs (CBIC), “The existing disclosure provisions regarding customs duty do not provide proper information about the medical products being traded.” That’s the reason why the CBIC has demanded that some questions need to be addressed about tax assessment.

As a fundamental part of dietary management, food that is prepared for patients with rare medical conditions, specific diseases, or disorders is specifically formulated to provide essential nutrition to them. To avail of this exemption facility, the individual importer is required to provide a certificate issued by either the Central or State Director of Health Services or the District Medical Officer/Civil Surgeon of their specific district.

Earlier, exemptions have been granted for specific medications utilised in the treatment of Spinal Muscular Atrophy or Duchenne Muscular Dystrophy. The government is presently receiving continuous requests for the relief of customs duty on drugs and medicines used to treat several rare diseases. These drugs and specialised food items, essential for managing such conditions, come with a high cost.

“It is projected that the annual treatment expenses for certain rare diseases, for a 10 kg child, can range from Rs 10 lakh to over Rs 1 crore per year. This treatment is typically lifelong, and the dosage and cost of medication increase as the child grows older and gains weight,” reports the ministry. The ministry has further stated that this exemption will lead to significant savings in costs and offer much-needed relief to the patients.