GST on Import of Goods —
How IGST Works
How IGST is levied on imports, the step-by-step landed-cost calculation on CIF + Basic Customs Duty, full ITC for registered importers, RCM on imported services and SEZ exemptions.
Every import of goods into India attracts IGST (Integrated GST), levied at customs on CIF value + Basic Customs Duty + other customs charges at the same slab as the domestic GST rate for that product — 5%, 18% or 40% under the GST 2.0 two-slab structure. A GST-registered importer claims full ITC of this IGST. Import of services is taxed at 18% under Reverse Charge (RCM). Basic Customs Duty is a cost; IGST is a pass-through credit.
IGST on Imports — Decision Table
IGST on an import equals the domestic GST rate for the same goods, so the correct rate follows the item's HSN code. Illustrative post-GST 2.0 category rates:
| Import category | IGST rate | ITC | Notes |
|---|---|---|---|
| Machinery / capital goods | 18% | Yes | Full ITC in month of import |
| Electronics & IT hardware | 18% | Yes | Was 28%/18% pre-GST 2.0 |
| Raw materials (metals, plastics) | 18% | Yes | Standard slab |
| Textiles & footwear (mass-use) | 5% | Yes | Rebased 12%→5% under GST 2.0 |
| Essential food / agri (taxable) | 5% | Yes | Some items nil-rated |
| Life-saving medicines (notified) | Nil | — | Specific HSN; check notification |
| Large cars / SUVs, sin & luxury | 40% | Yes* | Demerit rate; ITC if not blocked |
| Import of services | 18% | Yes | RCM — recipient self-pays |
| Imports into SEZ / EOU | Nil | — | Deemed foreign territory / FTP scheme |
IGST always follows the domestic slab for the goods under GST 2.0 (5%/18%/40%, eff 22 Sep 2025). *Motor-vehicle ITC may be blocked under Section 17(5). Confirm the exact HSN rate on the official portal before clearance.
How IGST on Import is Calculated
IGST is not charged on the CIF value alone. It is charged on the assessable value plus Basic Customs Duty and Social Welfare Surcharge, so the components compound. The formula is: IGST = (Assessable value + BCD + SWS) × IGST rate.
18% Import landed cost — ₹1,00,000 CIF
Cost vs credit split
Basic Customs Duty and the Social Welfare Surcharge go to the government permanently — they are a cost baked into your landed price. Only the IGST portion flows through the GST credit chain. Always model BCD + SWS as a cost and IGST as a pass-through when pricing imported goods.
Want your landed cost and ITC worked out for a specific HSN?
Get Import GST Advice →ITC on IGST Paid at Import
IGST paid at customs is fully available as Input Tax Credit to a GST-registered importer. It is reflected from ICEGATE into your GSTR-2B against the Bill of Entry and can be set off against CGST, SGST or IGST on your onward sales.
- Goods imported in the importer's own GSTIN
- Valid Bill of Entry on ICEGATE
- IGST reflected in GSTR-2B
- Goods used for taxable / zero-rated supply
- Capital-goods IGST claimable in full in month of import
- Not a blocked credit under Section 17(5)
For a registered business importer, IGST is effectively rate-neutral — you pay it at the port and recover it as ITC. The real, permanent tax cost of importing is the Basic Customs Duty and surcharge, not the IGST. Unregistered or personal importers, however, absorb IGST as a cost like BCD.
GST on Imported Services — Reverse Charge
When an Indian registered person receives a service from a supplier located outside India, the recipient pays IGST under Reverse Charge (RCM) at the rate that would apply to that service domestically — commonly 18%. The importer self-assesses the tax in GSTR-3B and can then claim it as ITC, subject to the usual conditions.
Import of goods
- IGST charged & paid at customs
- On CIF + BCD + SWS
- Reflected via Bill of Entry / ICEGATE
- ITC in GSTR-2B
- Forward levy at the port
Import of services
- IGST under Reverse Charge (RCM)
- Recipient self-pays, no customs
- On the invoice value
- ITC after paying RCM
- Reported in GSTR-3B
SEZ Imports & Export Refunds
Supplies to a Special Economic Zone are zero-rated, and goods imported into an SEZ unit are exempt from IGST (and often BCD) as the SEZ is a deemed foreign territory. Under Advance Authorisation and EPCG, inputs and capital goods for export production can be imported without IGST, with an export obligation attached.
IGST relief available if
- You import into an SEZ / EOU
- You import under Advance Authorisation or EPCG
- You export the finished goods (zero-rated)
- You supply to an SEZ developer / unit
IGST is a full cost if
- You are unregistered or importing for personal use
- Goods are for exempt or personal supply
- ITC is blocked under Section 17(5)
- No qualifying FTP scheme applies
Exporters recover input GST in two ways: export under LUT without paying IGST and claim an ITC refund, or export with IGST and claim a refund of the IGST paid. Refunds route through ICEGATE and the GST portal.
Importing under an SEZ, EOU or FTP scheme? Get your GST position confirmed.
Talk to a GST Expert →Frequently Asked Questions
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