GST On Import of Goods
The import of goods means supply of goods by a person who is located outside India to a person located in India. Its simple as importing goods from a person who is from outside India. Such transactions are defined as interstate trade or commerce and on which IGST shall be levied. And in addition to IGST the government also levy customs duties. The charge of duty is such as on import IGST would be levied in addition to BCD that is basic customs duty , and on some luxury items government can also levy additional duties.
“Import of Goods” with its grammatical variations and cognate expressions, means bringing in India from a place outside India
Example : – PYC Limited is a GST Registered company in India and who is importing Furniture from ABC Limited who is located at China of $ 1000/- on 05/12/2018 Conversion rate is 1 $ = 65 then XYZ imported services of Rs. 65000/- hence the Indian company PYC Limited shall be liable to pay IGST on imports.
Is GST applicable on Import of Goods in India ?
Yes on import of goods GST shall be applicable at rate as below
- On import of goods Basic Customs duty and IGST Shall be applicable
- Example : – Material cost Rs. 10000 , BCD rate 10 % & IGST rate 18 %
- Import Duty Calculator as below
Particulars Rate Tax Head Amount A Basic Customs duty
B Value for the purpose of levying integrated
Assessable value + BCD ( 10000+ 1000)
Credit of GST Paid on Import of Goods ?
The definition of “input tax” in relation to a registered person also includes the integrated tax charged on import of goods.
Thus simply the IGST credit of tax paid under head of IGST at time of import of goods shall be available to importer.
- Importer can utilize such credit paid for his domestic supply of goods. For taking credit of IGST importer need to have GST Registration .
- Credit of BCD shall not be available to importer , hence indirectly the duty paid under head of BCD become cost of import.
Legal Sections : –
Section 2(62) of CGST Act 2017.
“input tax” in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes–
- the integrated goods and services tax charged on import of goods;
- the tax payable under the provisions of sub-sections (3) and (4) of section 9;
- the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;
- the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or
- the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act,
but does not include the tax paid under the composition levy;
What are Documents required for import of goods in India ?
- Bill of Entry
- Commercial invoice
- Import Export Code
- Packing list
In addition to above documents if imported goods are subject to some government norms then Customs department may ask more documents from imported.
Benefit after GST on Import of goods
- IGST Credit available to traders
- By availing IGST Credit cascading effect of taxation is reduced
- Ensuring input tax credit availability across value chain
- Simplified taxation and procedure
- IEC Code linked to PAN
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