GST on Import of Goods — IGST Calculation, ITC & Import Guide

Updated: 3 June 2026 | IGST Act, 2017 & Customs Act, 1962 | FY 2025-26

All imports of goods into India are subject to IGST (Integrated GST) under the IGST Act. IGST is calculated on CIF value + Basic Customs Duty + other customs charges at the same rate as the domestic GST rate for that product (typically 5%, 12%, 18%, or 28%). GST-registered importers can claim full ITC on IGST paid. Import of services is taxed under Reverse Charge Mechanism (RCM). Exports are zero-rated; exporters can claim ITC refund.

ITC AVAILABLE

IGST paid on imports is fully creditable as Input Tax Credit for GST-registered importers
Unlike Basic Customs Duty (which is a cost), IGST on imports passes through the GST credit chain. Auto-populated in GSTR-2B from ICEGATE.

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IGST vs BCD: Basic Customs Duty goes to the government permanently — it is NOT creditable and becomes a cost. Only IGST portion is available as ITC. Always account for BCD as a cost when computing landed cost of imported goods, and IGST as a pass-through credit.

IGST Calculation on Import — Step-by-Step Example

Component	Amount (₹)	Note
CIF Value (Cost + Insurance + Freight)	1,00,000	Converted to INR at RBI reference rate
Landing Charges (1% of CIF)	1,000	Standard notional addition
Assessable Value for Customs	1,01,000	CIF + landing charges
Basic Customs Duty @ 10%	10,100	On assessable value; becomes cost
Social Welfare Surcharge @ 10% of BCD	1,010	Surcharge on BCD; becomes cost
IGST Base (Assessable + BCD + SWS)	1,12,110	IGST calculated on this total
IGST @ 18%	20,180	Creditable as ITC
Total Duty Payable	31,290	BCD ₹11,110 (cost) + IGST ₹20,180 (ITC)

Common Import Categories & Applicable IGST Rates

Import Category	BCD (Typical)	IGST Rate	ITC Available
Machinery / Capital goods	7.5%	18%	Yes (GSTR-2B)
Electronics / IT hardware	10–20%	18%	Yes
Raw materials (plastics, metals)	5–15%	18%	Yes
Pharmaceuticals (raw materials)	0–10%	12% / 5%	Yes
Food products / Agriculture	0–30%	5% / 0%	Yes (if taxable supply)
Textile fabrics	20%	12%	Yes
Automobiles / vehicles	60–100%	28%	Yes (unless blocked)
Luxury goods / jewellery	15–100%	3% / 18%	Conditions apply
Import of services (RCM)	Nil	18% / applicable rate	Yes (RCM ITC)

Zero-Rated Exports: Exporters of goods and services are entitled to claim refund of ITC accumulated on inputs used for exports. Two options: (1) Export under LUT (Letter of Undertaking) without payment of IGST and claim refund of ITC; or (2) Export with payment of IGST and claim refund of IGST paid. The GST refund for exporters is processed through ICEGATE and the GST portal in defined timelines.

Frequently Asked Questions

How is IGST calculated on import of goods?

IGST on import is calculated on the assessable value which includes: CIF value (Cost + Insurance + Freight) in Indian Rupees + Basic Customs Duty (BCD) + any other customs charges (landing charges, anti-dumping duty, safeguard duty, etc.). The formula is: IGST = (CIF + BCD + Other Customs Charges) × IGST Rate. For example: CIF = ₹1,00,000; BCD at 10% = ₹10,000; Total assessable = ₹1,10,000; IGST at 18% = ₹19,800. Total cost at port = ₹1,29,800. The IGST rate is the same as the domestic GST rate for that product. IGST is paid at customs clearance before the goods are released.

Can importers claim Input Tax Credit (ITC) on IGST paid on imports?

Yes. IGST paid on import of goods is fully available as Input Tax Credit (ITC) to GST-registered importers, subject to conditions. The IGST paid at customs appears in the ICEGATE portal and is auto-populated in GSTR-2B (monthly ITC statement). The importer can claim this ITC against output GST liability — either CGST, SGST, or IGST payable on domestic sales. Conditions: (1) The goods must be used for taxable supply or zero-rated supply (exports); (2) Tax invoice / Bill of Entry must be in the importer's GSTIN name; (3) No ITC on goods used for exempt supplies, personal use, or blocked credits under Section 17(5). ITC on capital goods imported: available in full in the month of import.

What is the difference between Basic Customs Duty and IGST on imports?

Basic Customs Duty (BCD) is a Customs Act levy that goes to the central government and is NOT creditable — it becomes a cost. IGST on imports is a GST Act levy that is fully available as Input Tax Credit for registered importers. This is a fundamental difference: BCD is a permanent cost; IGST is a pass-through for registered business importers. Additionally, BCD rates vary widely by product (0% to 100%+) and are governed by the Customs Tariff Act. IGST rates follow the same GST rate schedule as domestic supplies (5%, 12%, 18%, 28%). For unregistered importers or personal imports, IGST becomes a cost just like BCD since no ITC can be claimed.

How does GST apply on import of services?

Import of services into India is taxable under GST via the Reverse Charge Mechanism (RCM). When an Indian registered person receives a service from a foreign supplier, they are liable to pay IGST under RCM as the recipient. The rate is the same as if the service were supplied domestically in India. For example, consulting services from a US firm received by an Indian company: IGST at 18% on the invoice value, paid under RCM by the Indian company. The Indian company can then claim ITC on this IGST paid under RCM, subject to ITC conditions. For unregistered persons, import of services is taxable only if used in course of business, above certain conditions. Personal services imported (e.g., Netflix subscription by individual) are generally outside RCM scope for individuals.

Are imports into SEZ or export-oriented units exempt from IGST?

Yes. Supplies to Special Economic Zones (SEZs) and SEZ developers are zero-rated under the IGST Act. Imports of goods into SEZ units are exempt from IGST (and Basic Customs Duty in many cases) since SEZ is treated as a deemed foreign territory for customs purposes. Similarly, Export Oriented Units (EOUs) can import capital goods and raw materials at concessional/zero BCD and IGST rates under the Foreign Trade Policy (FTP) EPCG and Advance Authorization schemes. Goods imported under Advance Authorization (for export production) are exempt from BCD and IGST, with export obligation attached. SEZ units exporting goods can claim refund of IGST paid on inputs, or supply to SEZ without charging GST. Always verify the specific notification/circular for the product and scheme applicable.

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