Sitharaman Defends Additional Cess On Import Of Devices

Hyderabad, 16 Feb 2020:

To achieve the twin goals of supporting domestic manufacturers and generating funds to create health infrastructure, the Budget has imposed a 5 per cent health cess on import of medical devices, Finance Minister Nirmala Sitharaman said defending the Centre’s move.

Responding to an oncologist at an interactive meeting held at Hyderabad on Sunday, she said, “We have made considerable progress in medical equipment. Till few years back, we were dependent on imports for medical equipment. Now, we are able to manufacture medical equipment within the country and exporting to other markets.”

The proceeds from the 5 per cent health cess is to create infrastructure in aspiration districts, the Finance Minister said, adding that products that had a basic customs duty exemption and input materials would not attract the cess.

She further added, “Cities are fortunate where there are good hospitals. Tier-2 and tier-3 cities across the country are not so fortunate to have hospitals. Government hospitals are already under immense pressure. The 5 per cent cess that is provided will go into building medical infrastructure in these smaller cities, which do not have hospitals, which can be empanelled for Ayushman Bharat.”

The unutilised funds in Ayushman Bharat to the tune of Rs 3,500 crore is made available for patient care. These funds cannot be utilised to build medical infrastructure or buy equipment. These funds are only meant for patient’s welfare.

Those medical devices that are being produced in India, the same devices in the list if imported will alone attract cess. “If these devices are available in India, it serves my purpose of encouraging ‘Make in India’. Duties are not increased on those devices that are not produced in India. They can be imported. There is a clear logic in the cess that has been proposed in the Budget.”

Sitharaman was in Hyderabad on Sunday, as a part of the nationwide meetings being held by the Ministry of Finance to receive feedback on the Budget from industry and trade. Telangana Today