Import of Goods under GST- Brief Analysis

Article explains Definition of Import of Goods, Import of Goods- Scope of Supply under GST, Levy of GST on Import of Goods, Input tax Credit of GST paid on Import of Goods, Inter-state or Intra State supply, Place of Supply of import of Goods and Import of goods for personal use.

Definition of Import of Goods

‘’Import of goods’ with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India;

Hence bringing goods into India from outside India is Import of goods. There is no condition of receipt of payment in foreign currency.

Import of Goods- Scope of Supply under GST:

Transaction of import of goods is not covered by section 7 of CGST act, 2017 which is scope of supply hence Import of Goods transaction is not a supply transaction hence not chargeable to GST under GST act.

Levy of GST on Import of Goods:

To levy GST under GST act a transaction should be a supply, Since import of goods transaction is not supply hence GST is not leviable under GST act.

As per proviso to Section 5(1) of IGST act, 2017

IGST on import of goods shall be levied and collected as per section 3 of the customs tariff Act, 1975

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Value as per same above provisions

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At the time when other duties are levied under custom act (on filing bill of Entry)

Since GST paid on import of goods is levied under custom act, hence the same is custom duty.

Extract of Relevant proviso is as follows:

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.

Input tax Credit of GST paid on Import of Goods:

Since tax is being levied under custom act it is an custom duty. Credit of custom duty can not be taken under GST act unless there is specific inclusion in GST as input tax credit.

As per section 2(62) of CGST act, 2017 IGST paid on import of goods is included in the definition of Input tax. Extract of the same is as follows:

2(62) “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—

(i) the integrated goods and services tax charged on import of goods;

Hence GST paid on import of goods is treated as input tax and input tax credit can be availed.

Inter-state or Intra State supply

As per section 7(2) of IGST act import of goods shall be treated as inter-state supply.

Extract of the same is as follows:

7(2) 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.

Hence IGST shall be levied and charged on every import of goods transaction.

Place of Supply of import of Goods

As per section 11 of IGST act place of supply of goods shall be the location of the importer

Extract of the same is as follows:

11. The place of supply of goods,––

(a) imported into India shall be the location of the importer;

Import of goods for personal use

As the tax is levied and charged in custom act as custom duty, exemptions are also provided in custom act.

There are few items which can be imported into India in certain conditions upto certain limit is exempt from custom duty. Hence no GST is liable to be paid on such transactions.

Examples:

1. Cigarettes exceeding 200 or cigars exceeding 50 or tobacco exceeding 250 gms.

2. Alcoholic liquor or wines in excess of 2 litres.

3. One laptop computer (notebook computer) over and above the said free allowances mentioned above is also allowed duty free if imported by any passenger of the age of 18 years and above.

4. Others