A Complete Guide On GST On Import Of Services In India - DSRV India

What Is GST On Import Of Services In India? 

In the realm of import of goods or services under the IGST Act, India implemented goods and services tax through the provisions of GST in 2017. This means that the supplier is based out of India and is supplying his services to a person located in India. 

Thus, GST on import of services in India is a mandatory aspect, that influences inter-state businesses, trade policies, and consumers. Many indirect taxations like service tax, VAT, and exercise duty have been replaced by the GST tax law in India. 

Therefore, if any person importing services under GST fails to pay tax on the inter-state supplies. Then, heavy legal penalties can be levied on them without consideration which otherwise can harm their business growth in the long run. 

So, our experts at DSRV India, provide industry advice and tailored solutions like tax litigation services and GST litigation services to make your business bloom in a short period. Apart from that, we also provide company registration in Gurgaon services for people looking for a company setup in India. 

Let's delve deeper into the importance of GST on import of services in India in this blog. Read on!

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What Is The Importance Of GST On Import Of Services In India?

GST simplifies the process of taxable services for import that maintains uniformity and transparency through the course or furtherance of business services located outside India or within the country. It reduces the tax burden on businesses, by replacing multiple taxation on imported goods or services with a single tax process. 

Not only that, GST ensures that fair competition is maintained India's economic position is enhanced on the global market standards. 

Import Of Goods Under GST Act

According to the GST law regime, the import of goods is liable to pay a 10% GST tax to the IGST with Basic Custom Duty as per the Customs Department of Foreign Trade. The Central GST (CGST) and the State GST(SGST) combine the IGST for any exchange of goods within India. 

Import Of Services Under GST Act

Again, like the import of goods under the GST Act, the supply of services is also liable to pay taxes to the IGST. The total tax value is calculated based on the total imported value of the service as per the Customs Department. 

Goods And Services Import For Claiming Input Tax Credit (ITC)

If you are a registered taxpayer, then, you can avail Input Tax Credit on the tax that you have paid for importing your goods and services under the IGST Act. 

However, you can only claim the Input Tax Credit, if your services and goods imported fall under the business purposes. 

Legal Compliance Requirements For GST And Tax On Imports

To import services and goods in the inter-state or outside of the country, you need to adhere to various GST legal compliance. You must apply for a GST registration from the Customs Department with an Import Export Code to become an importer. 

You also need to pay GST on the imported goods and services for businesses and file for GST returns.

How Does GST On Imported Goods And Services Work?

GST for import of goods and services is levied at the entry point when import of goods and services into India is practiced. Thus, if you are a registered taxpayer, then you need to pay integrated GST on the import of goods. While the Reverse Charge Mechanism (RCM) is levied on the import of services. 

This means that you are directly paying the import GST to the government, which helps in revenue generation and legal compliance. 

Read Also: A Complete Guide: GST Registration Cancellation And Revocation Under GST Act

How Does DSRV India's Expert Solution Help You With GST On Import Of Services In India?

With 35+ years of experience, our experts at DSRV India can smoothly sail you through the GST complexities of the import of goods and services in India. We can help you with the proper import and export of services adhering to legal compliance. 

Apart from that, we also provide tailored solutions for your import operations so that you can minimize tax liabilities. So, with our strategic advice and proper documentation, you can seamlessly grow your business without any worries. 

Read More: The Insider's Guide To Mastering GST Refunds!

Conclusion

GST contributes largely to India's economic growth and maintains positive competition in the global market. That is why, understanding the role of GST on import of services in India is crucial for simplifying tax processes and maintaining transparency through the import of services in your business. 

You can also check DSRV India's taxation and GST services on our website for further assistance.