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Guide on Import of Goods and Services

Quick guide on Import of Goods and Services, including treatment, place of supply, ITC on IGST and other frequently asked questions

Guide on Import of Goods & Services | EZTax.in

  • Import of goods means bringing goods into India from a place outside India.
  • Import of Services means the supply of any service where the supplier of service is located outside India and the recipient and place of supply of service is in India.

Treatment of Imports under GST

  1. Supply of goods imported into the territory of India, till they cross the customs frontiers of India shall be considered as supply of goods in the course of inter state trade or commerce and accordingly IGST will be levied on imported goods.
  2. Supply of services which are imported into India shall be treated as supply of service in the course of inter-state trade or commerce.
  3. Importation of services for a consideration whether or not in the course or furtherance of business is treated as a supply under GST. This is the only exception to the condition of supply being in course or furtherance of business.

Place of Supply in case of Import of Goods

  1. The Place of supply in case of import of goods is the place where the importer is located.

    For Example: Mr M imports electric kettles from USA for her kitchen store in Hyderabad, Telangana. Mr M is registered in Uttar Pradesh. The Place of supply is Telangana

  2. The Place of supply of Services in case of either location of supplier or receiver is outside India is governed by Section 13.

Input Tax Credit of IGST

The input Tax credit of the IGST and the compensation cess paid at the time of import shall be available to the importer and the same can be utilized by him as input tax credit for payment of taxes on his outward supplies

The input tax credit of compensation cess can only be used for payment of compensation cess. But the Basic customs duty and education cess paid at the time of import shall not be available as input tax credit.


Quick GST FAQs

A comprehensive list of frequently asked questions on Import GST Guide

1. What are the conditions to be satisfied for a service to be classified as Import of Service ?

A) The following conditions need to be satisfied as per the definition of import of services

  1. The supplier of service is located outside India
  2. The recipient of service is located in India and
  3. The place of supply of service is in India.
2.What are the proxies to determine place of supply of services ?

A) The various elements involved in a service transaction can be used as proxies to determine the place of supply.

  1. Location of Service Provider.
  2. Location of Service Receiver
  3. Place where the activity takes place / place of performance
  4. Place where the service is consumed
  5. Place /Person to which /whom actual benefit follows
3.Is business test required in case of import of services?

Business test is not required in the case of import of services. Import of service is treated as supply even it is not in course of furtherance of business.

4.Who is liable to pay GST in imports ?

The importer is liable to pay IGST under Reverse Charge Mechanism under GST

5.Who is Liable to pay tax in case of import of OIDAR Services by unregistered non-taxable recipient ?

In case of import of OIDAR services, the supplier located outside India shall be responsible for payment of taxes. For this purpose, the supplier will have to take registration or will have to appoint a person in India for payment of taxes.

6.What is the time limit for application of refund in case of refund of unutilized ITC in case of Zero-rated supplies ?

The refund application should be filed within 2 years from the end of the financial year in which such claim for refund arises.

7.What is the time limit for application of refund in case of deemed exports where a refund of tax paid is available in respect of goods ?

A) The refund application should be filed within 2 years from the date on which return relating to such deemed exports is furnished.

8.What is the time limit for application of refund in case of services exported where a refund of tax paid is available in respect of services themselves ?

A) The refund application should be filed as follows

  • The refund application should be filed within 2 years from date of receipt of payment in convertible foreign exchange if Supply of Services has completed prior to receipt of such payment.
  • • The refund application should be filed within 2 years from date of issue of invoice if payment for such service has been received prior to issue of invoice.

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