All about Imports under GST

Imports of Goods and Services into India is liable to IGST as such supply of goods and services is deemed to be in the course of interstate trade or commerce. 

In the case of the Import of Goods, the importer will be liable to IGST and in the case of Importer of Services, the recipient of Services will be liable to pay IGST on a reverse charge. 

First we will look at Import of Goods and then we will discuss the import of Services under GST.

1. Import of Goods 

Import of goods means bringing the goods into Indian territory from a place outside India. As discussed earlier, the import of goods is liable to IGST as they are treated to be supplied in the course of inter-state trade or commerce. The recipient of goods will have to pay the IGST on Imports at the time of clearance at the customs station. The IGST will be collected by the Customs Department unlike in other cases where the GST department does the same. 


The place of supply in case of importer will be the location of the importer i.e. if a person belonging to Maharasthra imports some goods, the place of supply will be Maharashtra and the state portion of the tax collected in IGST will accrue to Maharashtra. 

IGST levied on the import of goods will be in addition to the customs duty levied on those goods. 


Point of Taxation of imported goods 

The point of levy of IGST on import of goods will be the point when the bill of entry of home consumption is filed i.e. when the import is complete and bill of entry is filed. 


Value of imported goods for the purpose of IGST levy

The value of goods for the purpose of levy of IGST on import of goods will be the assessable value as determined under section 14 of the customs act, 1962 plus the customs duty chargeable on the goods and any other tax/levy chargeable on the goods. 


Thus the value of goods for levying IGST = Assessable value as determined under custom act


                                                                                     Basic Custom Duty


                                                     any other tax/duty/levy which is leviable on the goods but excluding IGST


IGST on the goods supplied while being deposited in a custom warehouse

There are occasions when the goods are deposited in the customs warehouse by the importer without payment of duty. The importer can sell such goods while they are deposited in the warehouse. Such supply is not treated as supply till the bill of entry for home consumption is made. However, the customs duty is levied on those goods at the time of filing into-bound bill of entry. 

But the value of goods for the purpose of levy of IGST of the warehoused goods is calculated as under : 

Value of warehoused goods 

for the purpose of levy of IGST         =  (a) Transaction value i.e. sale value 


                                                              (b) value determined at the time of filing of the into-bond bill of entry

                                                                +  basic custom duty + any other tax/levy excluding IGST 

                                                                    whichever is higher 

If the goods are sold many times before being cleared for home consumption, the last transaction value will be taken for the purpose of determining the value for IGST purposes. 

Taxability of Transactions between non-taxable countries without actual receipts in India 


 There are transactions in which the goods do not come to India i.e. touch the Indian territory and move from one country to another but invoicing is done by a registered person in India. 

For example, X is a registered person in India and he gets an order from Y of the UK for the sale of some goods. X, in turn, finds a supplier from Australia i.e. Z. Now Z supplies the goods directly from Australia to the UK and the goods do not come to India. In this case, two bills are made i.e. by Z to X and by X to Y. 

As per CGST Act, these types of transactions are outside the purview of GST as the goods are supplied from a non-taxable territory to another non-taxable territory and hence they do not come under the purview of GST as they are treated neither supply of goods nor supply of services. 

Taxability of High Sea Sales 

It is a common practice in international trade that the original importer sells goods to a third party before the goods reach the custom port. These types of transactions are termed high sea sales. There can be multiple sales before the goods touch the custom barrier of India. All such sales are neither treated as supply of goods nor supply of services as per Schedule III of CGST Act. 

In the above case, the value of goods will be taken as the assessable value which is there at the time of filing of bill of entry for home consumption. Also, the last buyer who files the bill of entry will be required to pay the IGST at the time of filing the bill of entry for home consumption. 

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