Import and Export under Proposed GST


Current State: 

Central Government levy taxes when an article or thing is brought into its territorial limits. The duty is called Basic Custom Duty. It is the tax charged on imports. Along with Basic Custom duty, Countervailing Duties u/s 3(1) and 3(5) are also charged to compensate for the losses of Excise Duties and Sales Taxes as had the goods not been imported, the same had to be manufactured in India giving revenues to the Government in form of Excise and Sales Tax.

Proposed GST regime: 

Basic Customs Duty will continue to be levied even after the implementation of GST. However, the additional customs duty in the name of CVD u/s 3(1) and CVD u/s 3(5) will be subsumed in the import GST.


Current State: 

Under existing provisions of Service Tax Laws, where any person (subject to Entry no. 34 of Mega Exemption) imports the service in Taxable Territory, he is liable to pay service tax under reverse charge mechanism. Taxable event is decided as per Rule 7 of Point of Taxation.

Proposed GST regime:

Under proposed GST regime, the import of services will be subject to Central GST and State GST on a reverse charge mechanism and the same will be payable by the Importer on a self-declaration basis.

Place of supply rules will determine which state will have the authority to get the tax.

However, the taxes so paid will be available as Input Tax Credit and therefore, it would be a revenue neutral.


 Export of goods and services brings in foreign exchange to the country and hence to promote the exports, various incentives are provided to exporters. No Custom Duty or Service Taxes are charged on Export of Goods or Services in current scenario.

Even after the implementation of GST, Exports will be zero rated. Hence exporter of goods and services need not pay GST on their exports.

GST paid by them on the procurement of goods and services will be refunded.

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