GST Registration for Importers

GST registration is mandatory for taxable persons under GST. In most states, businesses having an annual aggregate turnover of more than Rs.40 lakh (In some states, Rs.20 lakh) should mandatorily obtain GST registration. In addition to the turnover criteria's other conditions have also been specified by the GST Council. However, all importers should mandatorily obtain GST registration, the individual requires GSTIN for clearing goods from the Customs Department. In this article, let us look GST registration for importers in detail.

GST Registration Required for Import of Goods

After the implementation of GST on 1st July 2017, the procedure and documents required for import of goods into India have changed. From 1st of July, 2017, quoting of GSTIN is mandatory for filing Bill of Entry as IGST is to be paid on imports and input tax credit can be availed for IGST paid. In addition to GSTIN, the requirement for PAN of the importer and IE Code for the importer would continue. Hence, all importers would be required to obtain

GST registration

, PAN and IE Code for their business or complete

GST migration

- if they had an existing tax registration.

IE Code Required for Import of Goods

Even after the implementation of GST, IE Code and PAN will be required for import. Import Export Code or IE Code is a registration under the Directorate General of Foreign Trade (DGFT) mandatorily required for import of goods into India. To obtain IE Code, a business would have to apply with the following documents to DGFT:

Digital Photograph (3x3cms) of the Managing Partner.
Copy of PAN card of the applicant entity.
Copy of Passport (first & last page)/Voter’s I-Card /UID (Aadhar Card) /Driving License/PAN (any one of these) of the Managing Partner signing the application.
Copy of Partnership Deed.
Sale deed for self-owned business premises; or Rental/Lease Agreement, for rented/ leased office; or latest electricity /telephone bill.
Bank Certificate as per ANF 2A (I)/Cancelled Cheque bearing preprinted name of the applicant entity and A/C No.

Import Procedure under GST

Integrated Goods and Services Tax and GST Compensation Cess would be applicable for cargo that arrives on or after 1st July 2017. Further, IGST shall apply on cargo that arrived prior to GST implementation for which Bill of Entry filed on or after 1st July 2017. In addition, if cargo arrived after 1st July 2017 but the individual filed the Bill of Entry in advance, then the Officer shall recall the Bill of Entry and assess the levy of IGST and GST Compensation Cess through the authority as provided.

The procedure for calculating IGST on Imports is illustrated below:

IGST on Imports - Calculation Methodology

Input Tax Credit for IGST Paid on Imports

Under GST,

input tax credit

is provided for the IGST and

GST Compensation Cess

paid on imports. However, the input tax credit cannot be availed for Basic Customs Duty or other types of customs duty paid during import. The GSTIN mentioned in the Bill of Entry shall apply to track the flow of input tax credit from import to consumption. Hence, in order to avail input tax credit, importers would have to mandatorily declare their GSTIN and

file GSTR-2

showing details of inward supply.

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Frequently Asked Questions

Common questions about GST Registration for Importers: Mandatory Compliance.

Yes, as per the article, GST registration is mandatory for all importers in India. The importer requires a valid GSTIN (GST Identification Number) to clear goods from the Customs Department and claim input tax credit on the IGST (Integrated Goods and Services Tax) paid on imported goods.

Apart from mandatory GST registration, importers also require a PAN (Permanent Account Number) and an IE Code (Import Export Code) issued by the Directorate General of Foreign Trade (DGFT) for importing goods into India.

The article provides a methodology for calculating IGST on imported goods. It involves adding the assessable value of the imported goods, Basic Customs Duty, and any other applicable customs duties (except IGST and GST Compensation Cess), and then calculating IGST on the total value.

Yes, under the GST regime, importers can claim input tax credit on the IGST and GST Compensation Cess paid on imported goods. However, input tax credit cannot be claimed on Basic Customs Duty or other types of customs duties paid during import.

The GSTIN mentioned in the Bill of Entry is used to track the flow of input tax credit from import to consumption. It is mandatory to declare the GSTIN and file GSTR-2 (Goods and Services Tax Return) showing details of inward supply to avail input tax credit on imported goods.

Yes, the article clearly states that even after the implementation of GST, an IE Code (Import Export Code) and a PAN (Permanent Account Number) are still required for importing goods into India, in addition to the mandatory GST registration.

To obtain an IE Code from the Directorate General of Foreign Trade (DGFT), the applicant needs to submit digital photographs, copies of PAN card, partnership deed (if applicable), proof of business premises, bank certificate, and a copy of an identity proof of the managing partner.

Yes, as per the article, both Integrated Goods and Services Tax (IGST) and GST Compensation Cess are applicable on goods imported into India after the implementation of GST on July 1, 2017.

The article states that if the cargo arrived before July 1, 2017, but the Bill of Entry was filed on or after July 1, 2017, then the Customs Officer shall recall the Bill of Entry and assess the levy of IGST and GST Compensation Cess through the prescribed authority.

No, the article clearly mentions that input tax credit cannot be availed for Basic Customs Duty or other types of customs duties paid during import of goods. Input tax credit can only be claimed on the IGST and GST Compensation Cess paid on imported goods.