GST

Import of Goods Under GST

By taxreaders

June 16, 2025 2 Min Read

12 0

Table Of Content

What Is GST on Imported Goods?
How Is GST Calculated on Imported Goods?
Input Tax Credit (ITC) on Imported Goods
Import Documents You Must Keep
Reverse Charge on Imported Services
Common Mistakes to Avoid
FAQs on Import of Goods Under GST
Can I claim ITC on import of goods?
Is customs duty credit allowed under GST?
What documents are needed for ITC on imported goods?
How is IGST on import calculated?
Are imported goods treated as interstate supply?
Final Thoughts

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Import of Goods Under GST

Importing goods into India brings exciting business opportunities but you also need to know about GST on import of goods, Integrated GST (IGST), and how to claim input tax credit (ITC). This guide makes it easy to understand the basics, with common keywords included to boost visibility.

What Is GST on Imported Goods?

When you purchase goods into India, it is considered as an inter-state supply, so you’re required to pay IGST along with customs duty. The Integrated Goods and Services Tax (IGST) ensures parity with domestic suppliers.

You may also need to pay:

Basic Customs Duty (BCD)
Social Welfare Surcharge / Health Cess
Compensation Cess (on certain goods, like tobacco)

How Is GST Calculated on Imported Goods?

GST is calculated on the assessable value, which includes:

Customs Assessable Value
Basic Customs Duty & Cesses (like social welfare or AIDC)

IGST is applied over this total value

Example: For a product valued at ₹1,000 with BCD = ₹100 and IGST rate 18%:

Total = ₹1,100
IGST = 18% of ₹1,100 = ₹198

Input Tax Credit (ITC) on Imported Goods

One of the major benefits of the GST system is that you can claim ITC on IGST paid during import, as long as:

You are GST registered
Goods are used for business purposes
You have valid documents like Bill of Entry

This ITC can then be used to offset GST liability on your later sales.

Import Documents You Must Keep

To claim ITC, maintain accurate records and documents:

GST Registration (GSTIN)
Bill of Entry (issued by customs)
Import Invoice or Debit Note
Import‑Export Code (IEC)
Delivery challan (if applicable).

Ensuring these are in place makes your GST compliance smooth and audit-ready.

Reverse Charge on Imported Services

If you import services (like consulting or IT services), you’re usually liable under reverse charge mechanism (RCM) to pay IGST. But this guide focuses on goods import.

Common Mistakes to Avoid

To avoid penalties:

Don’t miss GSTIN in Bill of Entry
Use imported goods for business only
File returns and claim ITC on time
Stick to correct valuation rules for customs

FAQs on Import of Goods Under GST

Can I claim ITC on import of goods?

Yes. You can claim ITC on IGST paid during import, provided you’re GST-registered and have proper documentation.

Is customs duty credit allowed under GST?

No. Only IGST (not BCD) can be claimed as ITC.

What documents are needed for ITC on imported goods?

Key documents include Bill of Entry, import invoice, GSTIN, IEC, and delivery challans.

How is IGST on import calculated?

IGST is charged on customs assessable value + customs duties (like BCD and cess).

Are imported goods treated as interstate supply?

Yes – they are treated as interstate supply, and IGST is applicable.

Final Thoughts

Importing under GST is straightforward once you understand IGST calculations, ITC eligibility, and maintain correct customs documentation. This ensures compliance and boosts your cash flow.