Under the new GST regime, both the imports and exports of goods and services in India would be treated as the supply of goods or services within the course of inter-state trade and commerce and they will attract IGST. Article 269-A constitutionally mandates that the supply of goods or services or both during import into the territory of India shall be deemed to be a supply of goods in the course of inter-State trade or commerce for levy of integrated tax.
The integrated tax would be levied on any import of goods or services which are deemed as inter-state supplies. While IGST on the import of services would be leviable under the IGST Act, IGST on the import of goods would be levied under the Customs Act, 1962 along with the Customs Tariff Act, 1975.
The Model GST Law will subsume Countervailing Duty (CVD) and Special Additional Duty (SAD), while Basic Customs Duty will keep on doing its round in the import bills. BCD has been kept outside the domain of GST and will be charged according to the present law as it were.
Some Implications of GST on the Imports and Importers
Imports coming into India under the new tax law will be considered as Inter-State supply and as a result, it will fall under the taxation rate of Integrated Goods and Services Tax (IGST) alongside BCD as well as other extra charges.
Import of Services – The model GST law grants the obligation of payment of tax on the receiver of the service if the supplier of the services is from outside India. This is like the arrangement of reverse charge, wherein the one benefiting is required to pay tax and file the return.
Refund of Duty – Tax paid under GST, on the import of goods or services will be accessible as a credit under the Import and Sale model. Additionally, refund of SAD or any such confinements is not set under GST.
Withdrawal of Current Exemptions – The previous customs import tax was stacked with various exemption notices which were probably going to be checked on and perhaps pulled back or changed over into a refund component. Withdrawal of exemptions or transforming them to refund instrument could essentially change the engaging quality and suitability of a portion of the key plans under the FTP like EOU, STP, advance approval and so on.
The Amount of GST Payable on Imported Goods – The amount of GST payable on imported goods would be subject to the assessable value in addition to customs duty demanded under the Customs Act, as well as whatever other duty is chargeable on the goods. The estimation of the imported article with the end goal of demanding GST Compensation cess would be an assessable incentive in addition to Basic Customs Duty collected under the Act. Along these lines, the IGST paid would not be added to the incentive with the end goal of computing GST Compensation cess.