How will Imports be Taxed Under GST?

The present government has put the much-awaited GST law in effect to ensure the nationwide uniformity of taxation laws under one regime. This helps in making the taxation process simplified by avoiding multiple taxation filing at both central and state level. Therefore, business owners, working professionals generating income by providing goods or services to the end user are now required to file GST instead of filing multiple taxations to different authorities.

This has made business transactions more easy and simple creating the swift business environment. In addition, it is applicable on all verticals of the domestic market of India this includes the import, export, and manufacturing amidst various verticals. Import of Goods and Services, it would be treated as interstate supply and IGST (Interstate Goods and Services Tax) would apply on the import of goods and services in the country.

The government of India has introduced Goods and Services Tax bill (GST) after much delay and debates in the political circle. The biggest benefit of introducing the GST tax regime is a unification of several taxation laws under one tax regime that simplifies the taxation applicable to the products, goods and services. The government of India has introduced Goods and Services Tax bill (GST) after much delay and debates in the political circle.

The biggest benefit of introducing the GST tax regime is a unification of several taxation laws under one tax regime that simplifies the taxation applicable to the products, goods and services. The GST tax regime ensures that the taxation becomes simplified and business transactions happen swiftly. The destination principle and tax revenue will get accrued, where the imported goods get consumed and an SGST would apply. A full and complete set-off will be made available on the paid GST on imports.

As per the guidelines ready for CGST (Central Goods and Service Tax) Act, whatever import will get shipped shall attract CGST and a certain percentage of IGST (Interstate Goods and Service Tax).

Whatever that would get fixed by the GST authorities will be applicable as per the guidelines of SGST act 2016.

The import of goods shall be treated, as the interstate supplies and IGST will be applicable in addition to the customs duties as well.

The CGST shall be consumed or transferred to the central government. The SGST levied against imports shall be credited to the state government.

Calculation Structure:

The basic customs duty shall remain the same. An assessable value of the imported goods is derived, and afterward, the customs duty gets finalized according to it.

After the implementation of the GST regime, there is no change expected as such like there are no basic changes to the mechanism or structure to fix the basic rate. It would be as per the old rate or any prescribed rate that the authorities shall fix.

The additional duty shall be merged with the goods and services act at the time of the imports. The additional duty that is charged in place of the excise duty and the special additional duty instead of sales tax or value-added tax shall be subsumed into the GST.

Related Post: What is the concept of supply under GST?

Like for example, ‘X’ imported goods worth of INR 10000 and incurred some expenses to produce the final good so a 10% of basic customs duty is chargeable on the imported goods and these manufactured goods were sold at 45000 plus applicable GST.

The cost of goods was 10,000, with additional BCD of 10% of the cost which makes the cost of imported goods as 11,000 and an additional charge of 5 %( 550) CGST and 7 %( 770) SGST of the cost of imported goods including BCD makes it 12,320.

When these imported goods are sold within the states for example 45000 with CGST on the import of 5% (2250) and SGST on the import of 7% (3150) computes the sale value as INR 50,400.

If you are a business owner and a working professional then feel free to consult the experts regarding GST queries and get the same resolved. In addition, the importers must have the GST number and GST return filing on time.

Therefore, if you are an importer that does not have the GST number, get help from the experts to get your GST Registration and GST Application processed on time.

By | 2018-08-08T07:24:34+00:00 February 7th, 2017|Categories: GST|0 Comments

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Pulkit Jain is the founder of LegalRaasta – India's top portal for registration, trademark, return filing and loans. Pulkit is a veteran CA with over 10+ of experience.

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