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Keep Price Of COVID Test Kits Below Rs 400: Delhi High Court

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The Delhi High Court on Friday directed that the test kits should be sold at a price not beyond Rs. 400/- per test kit inclusive of GST in larger public interest.

Acting upon a plea, the single judge bench of Justice Najmi Waziri observed that the petitioner has sought release of 7.24 lacs COVID 19 Rapid Test Kit and other COVID 19 related materials which have been imported and/or are being imported by the respondent from People’s Republic of China. On 25th March 2020, the petitioner had expressed a desire to import one million tests of WONDFO SARS CoV-2 Antibody tests. It requested the respondent to send it a Proforma Invoice and specify the delivery time at the earliest.  The respondent acknowledged the order and said that it would process and send the PI (Proforma Invoice) soon.

It was informed to the court that, on the 27th and 28th of March the ICMR/National Institute of Cancer Prevention and Research placed an order for five lakh COVID 19 Rapid Tests at the rate of Rs. 600/- per test. The total order value was Rs. 30 crores. The importer obtained a license to import medical material. No customs duty was payable for supplies made to ICMR.

The court was also informed that now all such material is duty exempt. Of the said order for 500,000 test kits, 2.76 lakh have already been delivered to ICMR and the remaining 2.24 lakh tests are expected to be delivered very shortly.

Mr. Jayant Mehta appearing for  the petitioner submitted that “according to the bi-partite agreement the material cannot be distributed in India, except through Rare Metabolics, which has already paid Rs. 12.75 crores to the respondent and this amount covers the cost of import of 5 lakh tests at the rate of USD 3 per test and the freight cost.”

Mr. Nagrath appearing for the respondent said that, the freight cost is in the range of approximately Rs. 2 crores for one million tests, 50% of the same would apply to the orders placed by the ICMR. The cost of import by respondent per test works out to US$3 per test x Rs. 75/- (US$ to INR exchange rate) = Rs.225/- + Rs.20/- freight cost = Rs.245/-. Multiplied into 5 lakh tests, the total cost to the respondent for the ICMR destined kits/tests is Rs.12,25,00,000/-.

The court observed that the country is going through an unprecedented medical crisis affecting public order. People have been cloistered in their homes or constrained to stay wherever they were on 24th March 2020. The economy is virtually at a standstill for the last one month. There is an element of disquiet apropos one’s safety. For people to be assured that the pandemic is under control and for governments to ensure and for agencies engaged in the frontline battle to safeguard people’s health, more kits/tests should be made available urgently at the lowest cost, for carrying out extensive tests throughout the country. Public interest must outweigh private gain. The lis between the parties should give way to the larger public good.

Thus the court directed that the kits/test should be sold at a price not beyond Rs. 400/- per kit/test inclusive of GST.

Mr. Mehta said that in the interest of the country he would not pursue the matter any further and would give up all further claims, in the case if the importer undertakes to sell the product at not more than Rs.400/- each, inclusive of GST.

Mr. Nagrath after getting the instructions agreed and said that they will supply the kits/tests at Rs.400/- each, plus GST i.e. at 40% lesser than the ICMR approved rate, directly to any Government or its agency or private entity duly approved to carry out these tests.

The Court while disposing the petition ordered that from the other 5 lakhs kits/tests, 50,000 shall be excluded for the State of Tamil Nadu and the remaining 450,000 would be available to the respondent to be disposed-off in terms of the above, directly to any Government or governmental agency or any private entity which has received due approval to carry out such tests.

-India Legal Bureau

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