Imports under GST
By: – Kishan Barai
Customs – Import – Export – SEZ
Dated:- 24-7-2017
In the GST regime, IGST and GST Compensation cess will be levied on imports by virtue of sub-sections (7) & (9) of Section 3 of the Customs Tariff Act, 1975. Barring a few commodities such as pan masala, certain petroleum products which attractlevy of CVD, majority of imports would attract levy of IGST. Further, a few products such as aerated waters, tobacco products, motor vehicles etc, would also attract levy of GST Compensation Cess, over and above IGST. IGST andGST Compensation cess, wherever applicable, would be levied on cargo that would arrive on or after 1st July, 2017. It may also be noted that IGST would also be levied on cargo which has arrived prior to 1st July but a bill of entry is filed on or after 1st July 2017.Similarly ex-bond bill of entry filed on or after 1st July 2017 would attract IGST and GST Compensation cess, as applicable.In the case where cargo arrival is a
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t, 2017. The rates applicable to goods of Chapter 98 are as under:
* 9801- Project Imports- 18%
* 9802- Laboratory Chemicals- 18%
* 9803- Passenger baggage – Nil Rate
* 9804- Specified Drugs and medicines for personal use- 5%
* 9804- Other drugs and medicines for personal use- 12%
* 9804- All other dutiable goods for personal use- 28%
Likewise, different rates of tax have been notified for goods attracting Compensation Cess which is leviable on 55 item descriptions (of supply). These rates are mostly ad valorem. But some also attract either specific rates (e.g. coal) or mixed rates (ad valorem + specific) as for cigarettes. The coverage of the goods under GST compensation cess isavailable on CBEC website along with their HSN codes and applicable cess rates.The IGST Rates of Goods, Chapter wise IGST rate, GST Compensation Cess rates, IGST Exemption/Concession are available on CBEC website for trade and departmental officers as well.
Valuation and method of calculation: IGST is l
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or higher education cess as well as anti-dumping and safeguard duties.The inclusion of anti-dumping duties and safeguard duty
in the value for levy of IGST and Compensation Cess is an important change. These were not hitherto included in the value for the levy of additional duty of customs (CVD) or Special Additional Duty (SAD).The IGST paid shall not be added to the value for the purpose of calculating Compensation Cess.
Although BCD, Education Cesses and IGST would be applicable in majority of cases, however, for some products CVD, SAD or GST Compensation cess may also be applicable. For different scenarios the duty calculation process has been illustrated in Annexure – I of this document.
IV. Changes in import procedures:
Importer Exporter Code (IEC): In GST regime, GSTIN would be used for credit flow of IGST paid on import of goods. Therefore, GSTIN would be the key identifier. DGFT in its Trade Notice No. 09 dated 12.06.2017 has stated that PAN would be the Import Export code
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ies will be exempted on imports made under export promotion schemes namely EPCG, DEEC (Advance License) and DFIA. IGST and Compensation Cess will have to be paid on such imports.
The EXIM scrips under the export incentive schemes of chapter 3 of FTP (for example MEIS and SEIS) can be utilised only for payment of Customs duties or additional duties of Customs, on items not covered by GST, at the time of import. The scrips cannot be utilized for payment of Integrated Tax and Compensation Cess. Similarly, scrips cannot be used for payment of CGST, SGST or IGST for domestic procurements.
VI. EOUs and SEZ:
EOUs/EHTPs/STPs will be allowed to import goods without payment of basic customs duty (BCD) as well additional duties leviable under Section 3 (1) and 3(5) of the Customs Tariff Act. GST would be leviable on the import of input goods or services or both used in the manufacture by EOUs which can be taken as input tax credit (ITC). This ITC can be utilized for payment of GST taxes payabl
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r heading 9801 and duty shall be levied @ 18%.
IX. Baggage:
Full exemption from IGST has been provided on passenger baggage. However, basic customs duty shall be leviable at the rate of 35% and education cess as applicable on the value which is in excess of the duty free allowances provided under the Baggage Rules, 2016.
X. Refunds of SAD paid on imports:
The need for SAD refunds arose mainly on account of the fact that traders or dealers of imported goods were unable to take credit of this duty (which was a Central tax) while discharging their VAT or Sales tax liability (which was State levy) on subsequent sale of the goods. Unless corrected through a mechanism such as refund (of one of the taxes) this would have resulted in “double” payment of tax.
With the introduction of GST on 01.07.2017, credit of “eligible duties” in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock, is permissible to registered persons not liable to be re
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, however the credit of basic customs duty (BCD) would not be available. In order to avail ITC of IGST and GST Compensation Cess, an importer has to mandatorily declare GST Registration number (GSTIN) in the Bill of Entry. Provisional IDs issued by GSTN can be declared during the transition period. However, importers are advised to complete their registration process for GSTIN as ITC of IGST would be available based on GSTIN declared in the Bill of Entry. Input tax credit shall be availed by a registered person only if all the applicable particulars as prescribed in the Invoice Rules are contained in the said document, and the relevant information, as contained in the said document, is furnished in FORM GSTR-2 by such person.
Customs EDI system would be interconnected with GSTN for validation of ITC. Further, Bill of Entry data in non-EDI locations would be digitized and used for validation of input tax credit provided by GSTN.
Reply By KASTURI SETHI as =
Dear Sir,
By entering in
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Kishan,
Very delighted with this article. Very useful. Thanks for all your efforts!!.
I have a query. EOU plans to import capital goods (machinery) for manufacture. What is the import duties applicable? If IGST is applicable, how we can get refund? There is no DTA sales. In pre-GST scenerio, all import duties on capital goods are exempted to the unit.
Please clarify.
Thanks and regards,
CA Sekhar PN
Dated: 25-7-2017
Reply By JAIPRAKASH RUIA as =
May be import under notification 52/2003-Custom and IGST refund through export under rebate in place of BOND/LUT.
Dated: 25-7-2017
Reply By Kishan Barai as =
An EOU will have to pay the applicable GST on the import or domestic sourcing of inputs (goods or services).
The EOUs will continue to get exemption from payment of the basic Customs Duty, however they will have to pay IGST on imports.
On the IGST paid on import of inputs, ITC would be available which can be used for payment of GST payable on the goods cleared in the DTA. Re
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re no SION is fixed).
* Refund of any benefits taken on procurement of inputs from DTA under Chapter 7 of FTP and used in the manufacture of products under DTA sale.
Supply of goods from one EOU to another EOU (inter-unit transfer) will require payment of applicable GST. The BCD exemption availed on inputs from the supplier EOU, used in such transferred goods would have to be reversed by the recipient EOU at the time clearance of such goods in DTA. Same provisions apply on sending of Goods for Job work.
For GST exempt Goods like Petroleum products, the existing provisions provided under notification no. 52/2003-Cus, notification no. 22/2003-CE and Notification no. 23/2003-CE will continue to apply for import, domestic procurement and domestic clearance.
Dated: 25-7-2017
Reply By JAIPRAKASH RUIA as =
Dear Sir,
Whether 52/2003-Custom is not available to EOU for duty free Import of input and capital goods subject to condition of said notification.
Dated: 25-7-2017
Reply B
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or it has to receive in the factory only.
Please share your view.
Dated: 25-7-2017
Reply By Kishan Barai as =
Kindly connect with me via Whatsapp (+91) 8128111191 I will try my best to help you in Export Import Business.
Dated: 25-7-2017
Reply By Ganeshan Kalyani as =
Nice article. Thanks
Dated: 26-7-2017
Reply By raghunandhaanan r vi as =
Sir,
One of our clients in Delhi had imported materials from overseas.
The GSTIN erroneously declared in the bill of entry was of Chennai unit instead of Delhi [Same IEC]
The consignee address in documents and bill of entry is of Delhi and duty paid by Delhi
Goods cleared from port on payment of applicable customs duties including IGST
My question is :
Whether we can amend the bill of entry now to change the IGSTIN of Delhiin place of Chennai already declared.
If not, can Chennai office claim the ITC and transfer it to Delhi account through IBT?
Request valuable advice from experts at the earliest. …… Thanks
Dated: 27-7-2017
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of ITC available
supply input or
(Name
er
O ee
ed tax
al
e/
of
State/U
input Integrat Centr
service/ed Tax
Capital
Stat Ces
al
e/ S
Tax
UT
Tax
UT
T)
goods
Tax
(incl.
Tax
plant and
machiner
y)/
Ineligible
for ITC
1
23
6
7
8
9
10
11
12
13
14
15 16
4A. Inward supplies received from a registered supplier (attracting reverse charge)
89
4B. Inward supplies received from an unregistered supplier
4C. Import of service
5. Inputs/Capital goods received from Overseas or from SEZ units on a Bill of
Entry
GSTIN Details of bill of Rate Taxable
Amount
of
supplier No.
entry
Date Value
value
Whether
input /
Amount of ITC
available
Integrated Cess
Tax
Capital
Integrated Cess
goods(incl.
Tax
plant and
machinery)/
Ineligible
for ITC
1
2
3
4
5
7
8
9
10
11
5A. Imports
5B. Received from SEZ
Port code +No of BE=13 digits
Assessable
Value
6. Amendments to details of inward supplies furnished in returns for earlier tax periods i
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s received from composition taxable person and other exempt/Nil rated/Non GST
supplies received
Description
7A. Inter-State
supplies
7B. Intra-state
supplies
8. ISD credit received
Composition taxable
person
2
Value of supplies received from
Exempt supply Nil Rated supply
Non GST
supply
3
4
5
GSTIN of ISD
ISD
Document
Details
ISD Credit received
Amount of eligible ITC
No.
Date Integrated Central State/ Cess Integrated Central State/UT Cess
8A. ISD Invoice
8B. ISD Credit Note
Tax
Tax UT
Tax
Tax
Tax
Tax
2
3
4
5
6
7
8
9
10
11
9. TDS and TCS Credit received
GSTIN of
Deductor/
Gross Sales
Value Return
Net Value
Amount
GSTIN of e-
Integrated
Tax
Central
Tax
State Tax /UT
Tax
Commerce
Operator
1
2
3
4
5
6
7
9A.
TDS
9B.
TCS
91
10. Consolidated Statement of Advances paid/Advance adjusted on account of receipt of
supply
Rate
Gross
Advance
Place of
supply
Amount
Paid
1
2
(Name of Integrated Central
State/UT)
3
S
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of rule
37(2)
To be added
(b) Amount in terms of rule
39(1)(j)(ii)
To be added
(c) Amount in terms of rule 42
(1) (m)
To be added
(d) Amount in terms of rule
To be added
43(1) (h)
(e) Amount in terms of rule 42
(2)(a)
To be added
(f) Amount in terms of rule
42(2)(b)
(g) On account of amount paid
subsequent to reversal of ITC
92
22
To be reduced
To be reduced
(h) Any other liability (Specify)
B. Amendment of information furnished in Table No 11 at S. No A in an earlier return
Amendment is in respect of
information furnished in the
Month
Specify the information you wish
to amend (Drop down)
12. Addition and reduction of amount in output tax for mismatch and other reasons
Description
Add to or
reduce
Amount
from
output Integrated Central State
CESS
liability
Tax
Tax
/UT
Tax
1
2
3
4
5
6
(a)
ITC claimed on mismatched/duplication of
invoices/debit notes
Add
(b)
Tax liability on mismatched credit notes
Add
Reclaim on account of rectific
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C. UQC:
Unit Quantity Code
d. HSN:
e.
POS:
f.
B to B:
g.
B to C:
Place of Supply (Respective State)
From one registered person to another registered person
From registered person to unregistered person
2. Table 3 & 4 to capture information of:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Invoice-level inward supply information, rate-wise, pertaining to the tax period
reported by supplier in GSTR-1 to be made available in GSTR-2 based on auto-
populated details received in GSTR-2A;
Table 3 to capture inward supplies other than those attracting reverse
charge and Table 4 to capture inward supplies attracting reverse charge;
The recipient taxpayer has the following option to act on the auto
populated information:
a. Accept,
b. Reject,
c. Modify (if information provided by supplier is incorrect), or
d. Keep the transaction pending for action (if goods or services have
not been received)
After taking the action, recipient taxpayer will have to mention whether
he is eligible
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3. Details relating to import of Goods/Capital Goods from outside India as well
as supplied by an SEZ Unit to be reported rate-wise by recipient tax payer in
Table 5.
4. Recipient to provide for Bill of Entry information including six digits port
code and seven digits bill of entry number.
5. Taxable Value in Table 5 means assessable value for customs purposes on
which IGST is computed (IGST is levied on value plus specified customs
duties). In case of imports, the GSTIN would be of recipient tax payer.
6. Table 6 to capture amendment of information, rate-wise, provided in earlier tax
periods in Table 3, 4 and 5 as well as original/ amended information of debit
or credit note. GSTIN not to be provided in case of export transactions.
7. Table 7 captures information on a gross value level.
8. An option similar to Table 3 is not available in case of Table 8 and the credit
as distributed by ISD (whether eligible or ineligible) will be made available to
the recipient unit and
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