Imports
GST FAQ 3rd Edition – December, 2018 – GST Frequently Asked Questions (FAQs)
GST
21.6 Imports
Q 65. How will imports be taxed under GST?
Ans. Import of Goods and Services are treated as deemed inter-state supplies and IGST is levied on import of goods and services in to the country. The IGST on import of goods is leviable under the provisions of Section 5 of the IGST Act, 2017 read with Section 3(5) of the Customs Tariff Act, 1975 and shall be levied at the time of imports along with the levy of the applicable Customs duties on the value in accordance with Section 3 of the Customs Tariff Act, 1975.
Q 66. What is import of goods under the GST regime? How are they taxed?
Ans. The import of goods has been defined in sub-section (10) of Section 2 of the IGST Act, 2017 as bringing goods into India from a place outside India.
The IGST Act, 2017 provides that the integrated tax on goods shall be in addition to the applicable Basic Customs Duty (BCD) which is levied as pe
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Value for Integrated Tax
Rs.111/-
(E) Integrated Tax @18%
Rs.19.98
(F) Value for Compensation Cess
Rs.111
(G) Compensation Cess @ 15%
₹ 16.65
(H) Total Duty ( B+C +E+G)
₹ 47.63
Q 68. Whether Anti-dumping duty/ safeguard duty are to be added for determining the value for integrated tax?
Ans. Yes. In cases where imported goods are liable to Anti-Dumping Duty or Safeguard Duty, value for calculation of IGST as well as Compensation Cess shall also include Anti-Dumping Duty amount and Safeguard duty amount. Let's say in the above case if Safeguard duty is ₹ 20/-, the assessable value for integrated tax as well as compensation cess shall be ₹ 131/-. The taxes calculation chart is as under:
Particulars
Duty
(A) Assessable Value
₹ 100/-
(B) Basic Customs Duty@10%
Rs.10/-
(C) Social Welfare Charge @10%
Rs.1/-
(D) Safeguard Duty
Rs.20/-
(E) Value for Integrated Tax
Rs.131/-
(F) Integ
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customs station to a warehouse.
The “transfer/sale of goods while being deposited in a customs bonded warehouse” is a common trade practice whereby the importer files an into-bond bill of entry and stores the goods in a customs bonded warehouse and thereafter, supplies such goods to another person who then files an ex-bond bill of entry for clearing the said goods from the customs bonded warehouse for home consumption.
As per section 7(2) of the IGST Act, 2017, the supply of goods imported into the territory of India, till they cross the customs frontiers of India, is treated as a supply of goods in the course of inter-State trade or commerce. Further, the proviso to section 5(1) of the IGST Act provides that the integrated tax on goods imported into India would be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975. Thus, in case of supply of the warehoused goods, the point of levy would be the point at which the duty is collected unde
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on. In other words, the supply of goods before their clearance from the warehouse would not be subject to the levy of integrated tax and the same would be levied and collected only when the warehoused goods are cleared for home consumption from the customs bonded warehouse.
Q 71. Whether high seas sales treated as supply in GST?
Ans. 'High Sea Sales' is a common trade practice whereby the original importer sells the goods to a third person before the goods are entered for customs clearance. After the High sea sale of the goods, the Customs declarations i.e. Bill of Entry etc. is filed by the person who buys the goods from the original importer during the said sale. IGST on high sea sale (s) transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, value addition accruing in each
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m IGST is only available till 01.10.2019.
Q 73. What are import of services? How are they treated in GST?
Ans. Import of services has specifically been defined under IGST Act, 2017 and refers to supply of any service where the supplier is located outside India, the recipient is located in India and the place of supply of service is in India.
As per the provisions contained in Section 7(1) (b) of the CGST Act, 2017, import of services for a consideration whether or not in the course or furtherance of business shall be considered as a supply. Thus, in general, import of services without consideration shall not be considered as supply. However, business test is not required to be fulfilled for import of service to be considered as supply.
Furthermore, in view of the provisions contained in Schedule I of the CGST Act, 2017, the import of services by a taxable person from a related person or from a distinct person as defined in Section 25 of the CGST Act, 2017, in the course or furthera
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person or from a distinct person
Not required Necessarily Required
Q 74. As per the Customs Act, 1962, royalty and license fees are includible in the assessable value of goods. Whether GST is also payable on such royalty and license fees which is already included in the value of goods and IGST is already paid at the time of import?
Ans. No. As per the notification no. 06/2018-Integrated tax dated 25th January, 2018, supply of services, imported into the territory of India covered by such temporary transfer or permitting the use or enjoyment of any intellectual property right are exempted from payment of integrated tax to the extent that royalties and license fees have been included in the transaction value as specified under rule 10(1)(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 on which the appropriate duties of Customs have been paid.
Q 75. What procedure will be followed by EOU to import goods without payment of Customs duty i
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ted from payment of integrated tax at the time of import subject to the importer undertaking to pay integrated tax on lease charges and other conditions as stipulated in notification no. 65/2017-Customs dated 8th July, 2018
Q 78. Whether import of rigs and ancillary goods imported under lease is chargeable to IGST?
Ans. Import of rigs and ancillary goods imported under lease is exempted from IGST, subject to payment of appropriate IGST on the supply/import of such lease service and fulfilment of other specified conditions.
Q 79. Whether bona fide gifts imported through post or air are exempted?
Ans. Bona fide gifts up to CIF value limit of ₹ 5000 imported through post or air are exempted from payment of basic customs duty and integrated tax.
Q 80. How are supplies by SEZs to DTA treated in GST?
Ans. Supplies by SEZs to DTA units are liable to GST. Supplies from SEZs to DTA can be categorised as under:
Supply under Bill of Entry: The supplies made by SEZ on cover of a bill
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