When goods or services enter India from foreign countries, they are classified as imports. Understanding the GST implications on imported goods is essential for businesses engaged in cross-border trade into India. GST on the import of goods is also a way for the government to generate revenue. The GST collection reached an all-time high of ₹2.37 lakh crore in April 2025.
In this blog, we’ll break down everything you need to know about GST on imports in India, including key provisions under IGST rules, applicable tax rates, customs duty implications, and the process of availing ITC. We’ll also cover how the GST treatment differs for goods and services, recent updates from the GST Council, and best practices for smooth compliance.
IGST on imports stands for Integrated Goods and Services Tax, which is imposed on goods and services imported into India. It is charged over customs duties and other imports to ensure that imported goods are taxed at the same rate as goods produced in India.
Before the introduction of the GST, imports were liable for different taxes such as customs duty, countervailing duty (CVD), and special additional duty (SAD). However, these have been substituted with a single tax named IGST under the GST regime. It has simplified the tax system and made it more consistent.
Suppose that someone brings in electronic products such as laptops or mobile phones from another country. In this case, they are required to pay IGST on the import of goods besides the basic customs duty. The IGST rate is determined by the nature of the product that is being imported and the GST rate applicable in the country.
Here is everything you need to know about the import of goods and services:
The act of physically bringing goods from one country to another is known as the import of goods. These goods are charged with tax under the Customs Act, and IGST is imposed at the point of entry where the goods are brought. The Customs collects the tax from the place where the goods are released to the importer.
If you purchase furniture from a foreign country, you’ll have to pay IGST to get it cleared from customs. The importer will be able to take input tax credit for that IGST if the goods are used in the business.
Import of services is when a foreign supplier provides a service to a recipient in India. In such cases, the recipient is liable to pay GST under the reverse charge mechanism in the Indian GST laws.
| Parameters | Import of Goods | Import of Services |
| Definition | Bringing physical goods into India | Supply of services from outside India |
| Governing Law | Customs Act, 1962 & IGST Act, 2017 | IGST Act, 2017 |
| Tax Collected By | Customs | Recipient of Service (under RCM) |
| When is IGST Paid | At the time of clearance of the customs | At the time of payment or invoice (whichever is earlier) |
| Who Pays IGST | Importer (via customs) | Service recipient (under Reverse Charge) |
| Eligible for ITC? | Yes, IGST paid may be claimed as ITC | Yes, IGST paid under RCM may be claimed as ITC |
The value on which IGST is determined is known as the assessable value. This value also includes:
Once the BCD value is added to the CIF value, IGST is determined on the total. Suppose you import machinery worth ₹1,00,000. The BCD rate is 10%, and the IGST rate is 18%.
The IGST on imports is deposited at the time of customs clearance. The importer is obliged to bring the IGST amount to the notice of the customs authorities while filing the Bill of Entry, which is the document used for customs clearance. When the IGST on import of goods is paid, the importer or the recipient can claim the IGST paid as credit if the service is used for business purposes.
The key benefit of the payment of IGST on imports is that it qualifies for input tax credit. This basically means that an importer is allowed to claim the tax they have paid on the import against the tax due on the sale under GST.
For instance, if a manufacturing unit imports raw materials on which IGST is paid, it is eligible to avail IGST input tax credit and use it to refund the GST payable on the local supply of finished products. This way, the whole mechanism of imposing the tax twice is averted, and the cash flow of the business stays uninterrupted. An importer who seeks such credit must make sure that:
The reverse charge mechanism is one of the special provisions of GST where the recipient and not the supplier is obligated to pay the tax. The rule is common in cases of GST on the import of services. If an Indian company or a resident buys a service from a foreign supplier who is not registered under GST in India, the recipient of the service will need to pay the GST to the government on a reverse charge basis.
For example, let’s say an Indian company decides to engage a consultant from the U.S. to carry out the market research. If the consultant does not have a GST registration in India, the Indian company will have to pay GST on behalf of the consultant. Here is the summary of the operation:
To follow GST on imports, importers are required to maintain proper records and file their returns accurately.
GST on imports of goods or services is mandatory by law. The levy of IGST on imports ensures tax parity between local and global supplies while allowing importers to claim input tax credit to prevent double taxation.
Maintaining proper documentation and compliance allows businesses to manage their import operations smoothly. It also enhances their credibility with financial institutions, improving their chances of qualifying for business loans. Apply for a business loan with DMI Finance to expand your import operations.
1. Do I need to pay IGST if I import goods for personal use and not for business?
No, IGST applies only when goods are imported for business or commercial use, not for personal consumption.
2. Can I use IGST input tax credit to pay my customs duty?
No, IGST input tax credit can be used only to offset GST liabilities, not customs duties like BCD.
3. Is IGST applicable to goods sent as free samples from abroad?
Yes, IGST may still apply based on the assessable value, even if the goods are sent free of cost.
4. What happens if I import goods temporarily for exhibitions or testing?
Temporary imports under specific customs provisions may be exempt from IGST, subject to re-export within a set time.
5. How do I check if the IGST I paid at customs reflects in my GST portal?
You can verify it in your electronic credit ledger on the GST portal; the data auto-populates from ICEGATE.
6. Do imports made through courier or post attract IGST?
Yes, imports through courier or postal shipments are also subject to IGST at the time of customs clearance.
7. Can I claim ITC on IGST paid for capital goods imported for business use?
Yes, IGST paid on imported capital goods is fully eligible for input tax credit.
8. Are imports from Special Economic Zones (SEZs) treated as imports under GST?
Yes, supplies from SEZs to the Domestic Tariff Area (DTA) are treated as imports and attract IGST.
9. Is IGST applicable to goods imported for charitable or educational purposes?
Yes, IGST is applicable to goods imported for charitable or educational purposes unless a specific exemption is notified by the government for that category.
10. What if I overpay IGST during import? Can I get a refund?
Yes, excess IGST paid can be claimed as a refund through the customs or GST portal after verification.
