Input Tax Credit For Imports

The GST system gives a temporary tax credit for IGST and GST offset taxes paid when items are imported into India. After the implementation of GST on July 1, 2017, all products imported into India would be classified as interstate supply. As a result, IGST applies.

Importers Need GST Registration 

In the GST regime, any taxable business or individual should get registered under GST. It is a simple process to get registered under GST. It can be done through the GST portal from anywhere with just access to the internet. To register under GST is, in itself, a straightforward process. You can visit the GST portal, and under the registration tab, enter all the required details, submit scanned copies of few essential documents that are required, and once the authorities authenticate your identity, your registration under GST will be complete. It is vital to get yourself registered under GST and to know whether you are liable to get registered, check the list below.

  • You should get registered under GST if you supply Goods and Services within the country or export/import.
  • You should register if you were registered under the previous tax regime such as Service Tax, Excise, Value Added Tax, Etc.
  • You must register if your business turnover is Rs. 40 Lakhs or above. ( The turnover threshold is Rs. 10 lakhs for northeastern states)
  • If you supply paid services or deal with selling goods online.
  • You should register if you sell digital products, such as software, SAS, etc.
  • You should register if you supply through E-commerce aggregator.
  • If you are a resident of India and supply goods or services occasionally.
  • If you do not have a fixed location of the business within the country, but you deal in supplying Goods and Services.
  • If you pay taxes under the reverse charge mechanism, the receiver is liable to pay taxes instead of the usual rule where the supplier of services or goods pays the taxes.

Filing GST Bill of Entry

With the implementation of GST, the entry invoice will be updated to reflect the importer’s GST. Importers who have a GSTIN can include it on key paperwork. Importers who have a temporary GSTIN might specify it to the GSTIN.

All items entering India after July 1, 2017, would be subject to the new laws and subject to IGST and GST offset taxes.

Calculation of Import Of GST  

IGST and GST compensation CESS will be billed for imported goods. The value of imported goods is the following aggregation. 

Value of Import articles by Customs Act, 1962

The value of imported products is used to compute GST compensation CESS and IGST, as well as education cess or higher education cess, as well as anti-dumping and safeguard taxes, as supported by the Customs Act of 1962. IGST, on the other hand, does not include a GST compensation certificate in the value to compute.

BCD, the Ministry of Education, and IGST may be applicable to the majority of items, although CVD, SAD, or GST compensation CESS may also be applicable.

Input Tax Credit For Imports

Input Tax Credit For Imports


Importers, and eventually supply chain beneficiaries, will be eligible to claim an input tax credit for Integrated Tax (IGST) and GST Compensation Cess. The importer must give the GST registration number (GSTIN) on the tax return in order to claim a temporary consumption tax credit for IGST and GST Compensation Cess. Furthermore, in order to claim the GST tax credit, the importer must submit GSTR-2 together with the GST tax credit and other applicable documentation. It should be noted that Basic Customs Duty (BCD) paid cannot be claimed as a tax credit.