Imports in GST Regime in India – Import of Goods and Services in GST – Main Points to be considered while Importing Goods and Services

All supply of goods, or services, which are imported into India as part of inter-State trade or commerce will be considered as Import.  Such transaction or import is considered as deemed inter-State supplies, and hence the IGST will be applicable per GST rules in addition to Custom duties.

Goods Import

The import of goods is defined as bringing goods into India from a place outside India.  The integrated tax will be applicable to Basic Customs Duty (BCD).  Thus, the value for IGST will be the sum of Assessable Value, BCD, and Cess, if any applicable.  If the Anti-Dumping Duty amount and Safeguard duty amount is applicable, then that also will be added before calculating IGST. Similar to GST invoicing in other domestic transactions, the tax invoices while importing is available for an Input Tax credit for outward supplies.

Service Import

The import of services for consideration as part of business falls undersupply per the GST rules.  The import of services without consideration is not supplied.  Hence, individuals need not pay tax for availing free services from portals like Google, Facebook, Amazon, D&B which are not located in India since there is no consideration for such services.  However, once we import (Downloading) a picture or song against payment as an individual without any tax registration, we need to pay tax which can be collected by the entity with the invoicing tool for tax payment which provides such service.  Here the business consideration is immaterial.  The supplier located outside India to make the IGST payment in the case of import of online information and database access or retrieval services (OIDAR) by unregistered, non-taxable recipients.

Import of services by an Indian branch from a parent company located outside India, as part of business, even if without consideration will fall undersupply.  The importer of services with tax registration will have to pay tax on reverse charge basis. Now you can try the trial version of the GST tax invoices tool from SmartAdmin which is generating tax invoices under GST.

The importer who is registered can use the IGST levied while importing goods as an input tax credit. During the outward supply of goods by the importer, the input tax credit could be used to pay taxes such as CGST / SGST / IGST. The importer can also avail GST Compensation Cess along with the input tax credit of IGST before transferring it to the ones in the supply chain. The importer, however, will not be able to avail of the credit of basic customs duty. The importer needs to declare GSTIN in the Bill of Entry to avail input tax credit of GST Compensation Cess and IGST.  For any clarifications on the points discussed, the documents as released by the tax authorities need to be referred and the content in such document prevails over the explanation given here.

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