Place of Supply for Imports – Explained

We have already covered the place of supply for goods, general services, and specific services in our previous articles. In this article, we focus on the place of supply of imports under GST transactions, along with numerous examples.

Basics of GST on Imports

As a basic principle, GST law treats all supplies of goods and services imported into India as inter‑state supplies, which means that all imports attract IGST. In addition, basic customs duty and other applicable customs levies continue to be charged.

• IGST on Imported Goods: Levied and collected under the Customs Act, 1962.
• IGST on Imported Services: Governed by the IGST Act with the importer paying IGST on a reverse charge basis (except for OIDAR services).
• Input Tax Credit (ITC): The IGST paid on imports can be claimed as ITC by the importer against GST liability on subsequent supplies.

Understanding the Place of Supply of Imports

For goods imported into India, the place of supply is determined by the location of the importer. For example, if an importer is located in Karnataka, then Karnataka will receive the state’s share of IGST.

Supply	Place of Supply	GST
Goods imported into India	Location of the importer	IGST
Services imported into India	Location of the recipient (or supplier if not available)	IGST

Place of Supply for Import/Export of Goods

General Rule: Goods imported into India: The place of supply is the location of the importer, and IGST is applicable. Goods exported from India: The place of supply is outside India, and such supplies are zero-rated (eligible for refund).

Examples: Example 1 – Import: Ms. Malini imports school bags from China for her shop (registered in Mumbai). Place of Supply: Mumbai GST: IGST

Example 2 – Export: Ms. Anita (Kolkata) exports Indian perfumes to the UK. Place of Supply: UK GST: Exempt (zero-rated)

Place of Supply for Import/Export of Services

General Rule: For services imported into India, the place of supply is determined by the location of the recipient. If the recipient’s location is unavailable, the supplier’s location is used. Reverse charge applies on the import of services, making the recipient liable to pay GST.

Example: If a service is provided in both Singapore and India, the place of supply will be India, and GST will be applicable.

Other Services

Example 1: Mr. Tom from London visits Mumbai and goes to the HSBC Mumbai branch. Place of Supply: Mumbai GST: IGST

Example 2: British Airways flies passengers from Mumbai to New York via London. Mr. Ajay, traveling from Mumbai to New York, embarks in Mumbai. Place of Supply: Mumbai GST: IGST

OIDAR Services

For imported OIDAR (Online Information, Database Access, and Retrieval) services provided to unregistered, non-taxable recipients in India, the overseas supplier is responsible for paying GST. The supplier must either register in India or appoint an agent in India to remit the tax. For further details, please refer to our dedicated article on the place of supply of OIDAR services.

Sale to SEZ Units

Supplies of goods or services (or both) to a SEZ developer or SEZ unit are treated as inter‑state supplies. Therefore, IGST will be applicable.

Key Takeaways

• Imports attract IGST, along with basic customs duty and other levies.
• Exports are generally zero-rated, allowing for GST refunds.
• For goods, the place of supply is the importer’s location; for services, it is usually the recipient’s location.
• Reverse charge applies on imported services, making the recipient liable for GST.

For any further assistance or queries regarding GST compliance on imports, exports, or specialized transactions, please feel free to contact DisyTax. We’re here to help you navigate GST complexities with clarity and confidence.