MAY 08, 2020

By S Murugappan, Advocate

PRIOR to the onset of Covid- 19 pandemic in India, exports of facemasks made of different materials were permitted without any restrictions. However, when the infection began spreading across India, the government thought it fit to prohibit exports of Covid-19 related medical supplies, including facemasks, to prevent any domestic shortage.

The Ministry of Commerce and Industry initially issued a notification No. 44 dated 31st January 2020 prohibiting the export of Personal Protection Equipment including clothing and masks by introducing a serial number 207A in the Schedule to the Export Policy. The scope of total prohibition as envisaged in the above notification was revised and further relaxations were introduced in terms of notifications Nos. 47 dated 8th February 2020, 48 dated 25th February 2020 and finally by 52 dated 19th March 2020 by amending the description of the goods against serial number 207A. This serial number 207A as it stands today prohibits export of goods with the description "surgical masks/disposable masks (2/3 Ply masks)". The ITC HS code for these products are given as 3926 90, 6217 90, 6307 90, 9018 90, and 9020.

The prohibition introduced and amended as above does not cover all masks. However as per reports, the customs authorities are not permitting exports of 'knitted cloth masks' involving substantial export earnings to exporters by citing the above prohibition.

At the outset, it is to be noted that the entry prohibiting the export of these masks itself has been shabbily introduced in the Schedule to the Export Policy. This Schedule is arranged chapter-wise and the serial number 207 appears under chapter 96 which covers 'miscellaneous manufactured articles' falling under chapter 96 of HS code. Now, as per the above notification, entry 207A, after 207, is a omnibus entry covering products of various chapters. Heading 3926 90 covers articles of plastics; 6217 90 covers parts of 'other made up clothing accessories'; 6307 90 covers 'other made up articles' of textiles; 9018 90 covers 'other instruments and appliances'; 9020 covers 'other breathing appliances and gas masks excluding protective masks and having neither mechanical parts nor replaceable filters'. Thus, without carefully determining the appropriate HS code for surgical masks/disposable masks, the Ministry of Commerce and Industry has put all possible HS codes in the notification as a matter of convenience and wriggled out of choosing/specifying the relevant heading.

After the corona pandemic broke out, the World Customs Organisation(WCO) in consultation with World Health Organisation has issued HS classification reference for Covid-19 medical supplies. In the second edition published on 9th April 2020, under 'face and eye protection equipment', masks have been described in the following manner in the above classification reference.

"Textile facemasks, without a replaceable filter or mechanical parts, including surgical masks and disposable facemasks made of nonwoven textiles. This includes the masks known as N 95 particulate respirators".

The HS classification code given for the above products is 6307 90.

Gas masks with mechanical parts or replaceable filters for protection against biological agents are shown against HS code 9020 00 in the above publication.

From the above, it can be seen that according to WCO, textile facemasks include surgical masks, disposable facemasks made of nonwoven textiles and also N95 particulate respirators.

The WCO's HS classification reference for Covid-19 medical supplies also mentions cellulose/paper masks falling under HS code 4818 50. Surprisingly, the Commerce Ministry's notification does not refer to such masks at all, either by way of description or by mentioning the HS code.

From the said notification, it can be seen that only surgical masks/disposable masks have been prohibited for export. Here also, the entry lacks clarity as surgical masks and disposable masks are not shown as separate products but linked by a 'slash'. Thus the entry gives scope to treat it as covering one of the items only or to treat surgical masks as well as disposable masks as referring to one and the same product.

According to US Food and Drug Administration (FDA), a 'surgical mask' is a 'loose fitting disposable device that creates a physical barrier between the mouth and nose of the wearer and potential contaminants in the immediate environment'. These are often referred to as facemasks although not all facemasks are regulated as surgical masks. On the other hand, a N95 respirator is described by FDA as a 'respiratory protective device designed to achieve a very close facial fit and very efficient filtration of airborne particles'. The edges of the respirator are designed to form a seal around the nose and mouth. Surgical masks as well as N95 respirators are not designed to be reused. As stated by the American Thoracic Society, disposable respirators, like N95, are 'meant to be thrown away after use'.

According to the US Centre for Disease Control and Prevention (CDC), N95 respirators and surgical masks are not recommended for use by general public. According to it, members of the public can use 'simple cloth face coverings when in any public setting to slow the spread of Covid-19 virus since this will help people who may have the virus and do not know it, from transmitting it to others'. CDC reports that such 'cloth face coverings' can be washed and reused. It is also clarified that these are not surgical masks or N95 respirators.

With increased recommendations for use of such cloth face masks during the present pandemic, now 'designer masks' are also being made to match one's dress/apparel.

From the above, it will be clear that such simple cloth masks made of knitted material or designer masks made of textile clothing do not come under the category of either 'surgical masks' or 'disposable masks'. They are not manufactured or claimed to be manufactured to meet the prescribed/required standards for 'surgical masks' and there should not be any prohibition for their export. It is to be kept in mind that what is prohibited are surgical masks/disposable masks and not 'all products' falling under the tariff headings mentioned in the notification. This notification itself, in paragraph 3, states "all other items (except surgical/disposable (2/3 ply) masks) allowed in the notification No. 48 dated 25.2.2020 shall remain 'free' for exports." Therefore, any attempt to stop exports of all products covered under the chapter headings mentioned in the notification will amount to a perverse interpretation of the relevant entry. Further, in the absence of any definition for these terms in the notification, the popular meaning assigned to these terms by the people and establishments dealing with such products, as mentioned above, needs to be adopted.

It is also to be noted that such simple cloth masks can be made/stitched easily at home and, therefore, export of such face masks cannot create any shortage for the public in general.

Covid-19 has brought in an economic recession of catastrophic proportions all over the world and, therefore, if our exporters are able to seize opportunities and make reusable textile masks as well as innovative/designer masks and export them to foreign markets at this point of time, that needs to be encouraged.

Crisis brings opportunities and the government should not snuff out such opportunities to exporters by inappropriate interpretations or by rigid policy regulations which may not serve any real and useful purpose.

If Indian exporters miss such opportunities during these hard times, exporters from other countries are waiting to seize them.

The early bird catches the worm! - An old English proverb

[The views expressed are strictly personal.]