What is imports under GST?
Import of goods: within Imports under GST The import of goods is defined as bringing goods into India from a place outside India. Here, the supplier of goods should be outside India but the recipient of the goods is based in India, and the place of supply of goods is also within India.
Import of Services: The import of services is defined as the supply of a service by a supplier who is based outside the country, but the recipient of the services is based in India, and the place of supply of services is also within India.
Levies under GST on Import of Goods
All imports shall be deemed as interstate supplies. Hence, IGST shall be levied along with basic Custom Duty (BCD), Anti-dumping duty and safeguard Duty. IGST shall be levied as per Customs Act.
However, IGST will replace the Additional duties of Customs, which are in common parlance referred to as Countervailing Duty (CVD) and Special Additional duty of Customs (SAD), barring a few exceptions.
In addition, GST compensation cess may also be leviable on certain luxury and de-merit goods under the Goods and Services Tax (Compensation to States) Cess Act, 2017.
Registration under GST on Import of Goods
From 1st of July, 2017, quoting of GSTIN is mandatory for filing Bill of Entry as IGST is to be paid on imports and input tax credit can be availed for IGST paid. In addition to GSTIN, the requirement for PAN of the importer and IE Code for the importer would continue. Hence, all importers would be required to obtain GST registration, PAN and IE Code for their business.
Place of supply under GST on Import of Goods
within Imports under GST the Place of supply of any goods imported into India is the location of the importer. Therefore, if an importer is located in the state of Delhi, the state’s share of IGST will go to Delhi.
Taxable value under GST on Import of Goods
Assessable value & all custom duty levied under Customs Act will form part of value of goods for calculation of IGST.
For example, if the Assessable Value of the commodity inclusive of landing charges is Rs.500, IGST is levied at 12%, Basic Customs Duty is levied at 10%, Education Cess is levied at 2% and Higher Education Cess is levied at 1%, the calculation of duty will be:
BCD = 10% of Assessable Value (10% of Rs.500) = Rs.50
Education Cess = 2% of BCD (2% of Rs.50) = Re.1
Higher Education Cess = 1% of BCD (1% OF Rs.50) = Rs.0.50
IGST = 12% of (Assessable Value + BCD + Education Cess + Higher Education Cess) = Rs.66.18
Payment of tax under GST on Import of Goods
Under The Customs Act, 1962, removal of goods from a customs station can be done only after payment of Customs Duty and the Integrated GST tax payable. Thus, the importer would be required to pay the integrated tax along with custom duty at the time of removal of goods from a customs station to a warehouse.
Input Tax Credit under GST on Import of Goods
Input tax credit of the integrated tax & compensation cess paid at the time of import shall be available to the importer and the same can be utilized by him as Input Tax credit for payment of taxes on his outward supplies. The Basic Customs Duty (BCD) shall not be available as input tax credit. The GSTIN mentioned in the Bill of Entry is used to track the flow of input tax credit from import to consumption. Hence, in order to avail input tax credit, importers would have to mandatorily declare their GSTIN.
Import of Services General Considerations
As already defined above, Import of Service means services received from outside India, in India. It is important to know now whether import of service is chargeable to tax under GST. Well, the answer lies in two different situations. Those are:
· Import of Services should for consideration. Here, it does not matter whether that service is in course or furtherance of business or not.
· Import of Service in course or furtherance of business, for consideration or without consideration.
Levies under GST on Import of Services
Import of services shall also be treated as interstate supply. Hence, IGST will be charged.
In general, all import of services falls under Reverse Charge Mechanism (RCM) in GST, except services of OIDAR (Online Information and Database Access and Retrieval services).
Reverse Charge Mechanism means tax will be paid by receiver of the services but in case of OIDAR services tax will be paid by the supplier i.e. Froward Charge Mechanism.
Registration under GST on Import of Services
For RCM, Service Recipient required to obtain registration under GST but in case of OIDAR services, supplier of service needs to get himself registered under GST.
Place of supply under GST on Import of Services
|Service||Place of Supply|
|Default Rule||Location of Recipient|
|Services Relating to Goods required physical availability||Location of Service performed|
|Services Relating to Immovable Property||Location of Property|
|Services Relating to Event or amusement park||Location of event or park|
|Service provider is Bank, NBFC to account holders, Intermediary services, Hiring of Transportation services||Location of Supplier|
|Transportation other than by mail or courier||Place of Destination of goods|
|Passenger Transportation||Place of Embark|
|OIDAR||Location of Recipient|
Taxable value under GST on Import of Services
The value on which IGST shall be charged in case of imported services is the value determined under section 15 of the Central Goods and Services Tax Act.
Payment of tax under GST on Import of Services
For RCM, Service Recipient required to pay under GST but in case of OIDAR services, supplier of service needs to pay tax under GST.
Input Tax Credit under GST on Import of Services
As the tax is paid by importer on RCM basis, he can take input credit for the same and can utilise that credit for further payment of tax under GST.
Important Considerations for Imports under GST
· In case of import of Goods 8 digit HSN code will be mandatory.
· Refund in case of less GST on outward supply than inward supply can be claimed by importer.