Import and Export under GST

by Legal Salaah Business Registration Solutions in India

One of the major factors responsible for the country's growth in terms of economy is foreign trade which includes import and export of goods and services. In the GST regime, the tax has been put down which means the taxes are not anymore applicable on export of goods and services. This was done to reduce the burden of the sellers and to ensure that the taxation policy does not come in the way of development of the country.

Let us learn more about those taxpayers who submitted GST Registration Online application to import and export goods and services under the GST portal:


Under the current GST policy, supply will only be considered as Imports if it fulfills the following conditions:

  • The import of goods and services shall be treated as an inter-state exchange. IGST and Basic Custom Duty will be levied on the goods and services imported into the country.

  • The home country of the service provider must be located outside India.

  • The one receiving the service must be located inside the home country.

  • The geographical location must be inside the home country.

Import of Services

For example,

Tina hires a few IT experts from the United Nations to work in her new company in Bangalore, India.

In this scenario, we can see that Tina who is from India wants IT experts from the USA to work for her company situated in India. As we can see it satisfies all the three conditions mentioned above so this can be considered as an import service.

Import of goods

Under the GST policy, a person is ought to pay customs duty and IGST during the import of goods. The only difference is before GST, CVD and SAD were levied but currently, it has been changed to IGST. The IGST shall be imposed as per the rates applicable for the imported goods. An importer is allowed to claim a full tax credit of the paid IGST during the imports. The main advantage of IGST is this input tax credit because previously importers were not allowed to claim the tax credit on CVD and SAD.


As discussed above exports are considered as zero-rated i.e. No tax must be deposited on the export of goods or services. An exporter can always claim the tax paid during purchases, manufacturing the goods which are later exported.

A service can only be considered as Export if the following conditions are satisfied

  • The place where supply is to be done must be outside the home country.

  • The payment for the service received must be paid in convertible foreign exchange.

  • The supplier and the recipient should not be an establishment of the same person.

For example,

Shweta who was working in a multinational company in Chennai was sent to Russia for a project where she was paid in Russian currency.
Here, in this case, as we can see Shweta who is an Indian resident went to work for a Russian Company or provided service to Russia and she was getting a salary in Russian currency. So this exchange of service can be called as export and hence no charges will be imposed.


The taxes and treatment of taxes for imports and exports remain the same. Full input credit is provided on the IGST paid on imports in case of an importer. In the case of an exporter, payback will be provided on the taxes that are already paid on inputs required as a part of the business. The costs of import and export are expected to slash down under the new regime

know More about IEC code or Import-Export code

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About Legal Salaah Innovator   Business Registration Solutions in India

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Created on Oct 2nd 2019 03:09. Viewed 267 times.


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