Aug 072017

Tax applicable in case of import of goods

Meaning of goods imported into India and its status under GST:

As per section 2(10) of the IGST 2017, import of goods means bringing goods into India from a place outside India. Sub-section 2 of section 7 provides that Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.

Manner of levy of imported goods:

Section 5 of IGST act provides for levy and collection of IGST. Proviso to section 5 provides that integrated tax on goods imported into India shall be levied and collected in accordance with section 3 of the customs act. “Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, 1962.

Place of supply:

The place of supply has very significant role under GST. It clarifies the appropriate taxing government to who tax to be deposited. Section 11 of IGST act provides that the place of supply of goods,––

  1. a) imported into India shall be the location of the importer;
  2. b) exported from India shall be the location outside India.

Whether tax paid on import of goods / services is eligible for Input Tax Credit:

As per section 2(62) of CGST act – “) “”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— (a) the integrated goods and services tax charged on import of goods but does not include the tax paid under the composition levy.


(a)   Import of goods shall be treated as inter-state sale under GST.

(b)   Such inter-state sale shall be taxed in the taxable territory of the state where importer is located.

(c)   Valuation of such goods shall be done by as per principle and rules specified in customs act.

(d)   Customs clearance shall be done only after payment of GST.

(e)   Normal GST rates would not be applicable to such goods. Tax rates schedule as applicable under customs tariff act will be applicable to calculation of GST.

(f)    Importer shall be eligible for ITC on tax paid at the time of importation if other conditions relating to claiming of ITC is fulfilled by him.