Imports under GST for Goods and Services, Import Procedure and related Concepts

Updated: Sep 21,2019 10:31 IST


Imports under GST for Goods and Services, Import Procedure and related Concepts
Imports under GST gives you a wide knowledge to understand how GST influences the Imports in India. After the introduction of GST, the taxes applied on Imports have been changed from earlier format. Get to know more on Imports under GST and various concepts involved from this article.

What are the Types of Imports under GST?

IGST Act 2017 explains the import of goods or services i.e. bringing in goods and services into India from any place outside of India. According to the Act,  in the process of supply of goods or services, when the supply is to happen into the territory of India or in case of inter-state trade are charged under IGST or Integrated Goods and Services Tax. Sales within same state are taxed under CGST and SGST where sales across Inter-state are taxed under IGST. Imports on GST are defined under IGST. IGST is applied for the goods which are imported with custom duties.

Information on Imports of Goods Under GST

Under Section 2 (10) of IGST Act 2017, import of goods or bringing goods into India from any place outside India are Import of goods under GST and taxed under IGST. Supply of goods across two states are also taxed under IGST. Procedure of Importing Goods are given in the steps below -- Goods arrive in India at a Custom Station >> Payment of Customs Duty, IGST and GST Compensation Cess (Cess, if applicable) >> Goods released to Importer. Some charges like safeguard duty, education cess, basic customs duty, anti-dumping duty do not impact the import of commodities. When supply of goods or services are imported into India, it is considered as inter-state trade which attracts integrated tax.

What is the Imports of Services under GST?

Under the Section 2 (11) of IGST Act 2017, Import of services supply of service where (i) the supplier of service is located outside India (ii) the recipient of service is located in India and (iii) the place of supply of service is in India. Import of Services are taxed under IGST as all of the Imports are taxed under IGST. When import of services is performed for any consideration, it falls under the category of supply. If there is no consideration for the import of services, it shall not be deemed as supply. According to Section 25 of Central Goods and Services Act 2017, any service obtained by any individual who is taxable, from their relative or any distant individual will be considered as supply even if it is involved with or without consideration.

What is the Amount of GST on Imported Goods?

HSN (Harmonised System of Nomenclature) code has been used for the purpose of classification of goods under the GST regime and this classification of the item aims for Customs Duty purpose and IGST calculation purpose would be harmonised. The amount of GST payable on imported goods would be dependent on the assessable value plus customs duty levied under the Customs Act, and any other duty chargeable on the goods. The value of the imported article for the purpose of levying GST Compensation cess would be, assessable value plus Basic Customs Duty levied under the Act, and any sum chargeable on the goods in the same manner as a duty of customs. Thus, the IGST paid would not be added to the value for the purpose of calculating GST Compensation cess.

What is Input Tax Credit?

Registered importer of the goods or services can use the IGST that falls on them as input tax credit. When importer supplies the goods outwards, he/she can use input tax credit towards CGST, SGST or IGST. But this does not apply for the basic customs duty payment. Importers can utilise the option of GST Compensation Cess along with Input Tax Credit IGST before transferring it to the other in the supply chain. For GST compensation, one give declare their GSTN register number in the bills mandatorily. Information of the Bill of Entry will be verified by GSTN. 

What is the GST Rate for Goods?

Goods and Services Taxes implemented in 2017 had separate taxing for Goods.  The Council has broadly approved the GST rates for goods at nil rate, 5%, 12%, 18% and 28% to be levied on certain goods. GST on Goods are taxed under both State GST and Central GST. Check for Detailed GST rates for Goods  - GST Rate Schedule for Goods.

What is the GST Rate for Services?

Like Goods tax under GST, Services had different tax rates. The Council has broadly approved the GST rates for services at Nil, 5%, 12%, 18% and 28% as listed below. Various Services GST rates charged are listed in the given link - GST Rates for Services.

What is GST Registration?

GST Registration started along with the GST Bill that was passed on July 1, 2017. Before GST was introduced, registration was done under different fields and after GST all these was bought under a single roof. As per GST, tax will be collected for goods and all services provided across India under State and Central GST. GST registration has been made mandatory for those dealers with more than Rs. 20 lakh per annum. To make GST Registration, one should be eligible and proper submission of documents has to be made.

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