Karnataka High Court Issues Notice On Plea Seeking GST, Royalty Exemptions For COVID Vaccines

A division bench of Chief Justice Abhay Oka and Justice Aravind Kumar issued the notice and directed the respondents to file their statement of objections within a period of three weeks. The petition which is filed through MANIK B. T of Thiru & Thiru Advocates, states that if rapid vaccination of the entire population of India is not in place, there will be a significant threat not only to the health of Indian citizens but also to the nation's economy and security.

The petition seeks directions to 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 plea claims that India requires approximately 2.7 Billion doses of COVID-19 vaccines within the next few months to vaccinate its entire population. With the present capacity, or even with double the capacity of the current two producers of the vaccines SII and Bharat Biotech, it will be a herculean task and next to impossible to administer the vaccine to the rest 14 of the population in an expeditious manner, unless the Union of India takes rapid steps to address this situation.

"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.

Further, it is said Government of India has taken the right step by moving an application along with a few other nations before the World Trade Organisation (WTO) seeking a waiver of certain provisions of the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement for the prevention, containment and treatment of COVID-19 Vaccines.

However, it is said "Even though the Government of India has moved the WTO for waiver of intellectual property, the move may or may not succeed, and even if it does succeed, it may take months or years. Under the said circumstances, it is the duty of the Government of India to exercise its powers under the Patents Act 1970 to persuade the global pharmaceutical companies as well as the Indian Bharat Biotech to enter into multiple licenses with several pharma companies in India for the manufacture of vaccines for COVID-19."

Moreover, 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 also seeks that 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 court refused to grant any interim relief and posted the matter for further hearing after three weeks.