Import from foreign vendor
Purchasing goods in India from a place outside India is import of goods. For services, if the supplier is located outside India, the recipient is located in India and the place of supply is in India, then it's called Import of services. Purchase of goods and/or services from a foreign vendor is subject to reverse charge, that is, the person importing goods or services has to remit tax to the government.
Process for purchase from a foreign vendor is explained in this document.
Hinweis
The tax rates and amounts below are illustrative. Confirm current import and tax requirements separately.
Create a purchase invoice
- [!INCLUDE [open-search](../../includes/open-search.md)] Purchase Invoices, and then choose the related link.
- Select Vendor on Purchase Invoice header, GST vendor type should be Import.
- Select Item for goods, G/L Account for services, or Fixed Asset on the invoice line. Check GST Group Code and HSN/SAC Code. Set GST Credit to Availment or Non-Availment, as appropriate.
- GST Credit option can be changed in document line.
- For goods, enter GST Assessable Value and Custom Duty Amount on the line as applicable. These values aren't allowed for service groups or Charge (Item) lines.
- For goods invoiced with a bill of entry, enter Bill of Entry No., Bill of Entry Date, and Bill of Entry Value on the header before posting.
For services from an associated enterprise, check Associated Enterprises on the header. This setting distinguishes the associated-enterprise examples below from ordinary import service transactions.
In the goods and fixed asset examples below, INR 11,000 is the GST Assessable Value before adding INR 1,000 of basic customs duty. The resulting tax calculation base is INR 12,000, even though the supplier's transaction value is INR 10,000.
In case of import of goods from foreign vendor, IGST is to be calculated on GST Assessable Value + Basic Custom Duty.
For example, purchase invoice is issued INR 10000, Custom Duty is INR 1000. Therefore, on GST Assessable Value INR 11000,(IGST @18%) has to be charged. Calculation base: (18% on 11,000 GST Assessable Value + 1,000 BCD) (12,000*18%).
GST calculation appears in the Fact Box as following:
Component Amount Transaction Value 10000 GST Assessable Value 11,000 Custom Duty (BCD) 1000 GST Base Amount 12,000 IGST 2160 (18% on 11,000 GST Assessable Value + 1,000 BCD) (12,000*18%) GL Entries for import of goods from foreign vendor where input tax credit is available are as following:
Particulars Amount Purchase Account (Transactional Value+ BCD) 11000 IGST Receivable Account (GST on GST Assessable Value + BCD) 2160 Customs House Account (GST Amount + BCD) -3160 Vendor Account (Transaction Value) -10000 GL Entries for import of goods from foreign vendor where input tax credit isn't available are as following:
Particulars Amount Purchase Account (Transactional Value+ BCD + IGST Amount) 13160 Customs House Account (GST Amount + BCD) -3160 Vendor Account (Transaction Value) -10000
Import of Fixed Asset from foreign vendor, IGST is to be calculated on GST Assessable Value + Basic Custom Duty.
For example, purchase invoice is issued for INR 10000, Custom Duty INR 1000, GST Assessable Value INR 11000,(IGST @18%) has to be charged. Calculation base: (18% on 11,000 GST Assessable Value + 1,000 BCD) (12,000*18%).
GST Calculation appears in the Fact Box as following:
Component Amount Transaction Value 10000 GST Assessable Value 11,000 Custom Duty (BCD) 1000 GST Base Amount 12,000 IGST 2160 (18% on 11,000 GST Assessable Value + 1,000 BCD) (12,000*18%) GL Entries for import of goods from foreign vendor where input tax credit is available, will be as following:
Particulars Amount Fixed Asset Increase During the Year Account (Transactional Value+ BCD) 11000 IGST Receivable Account (GST on GST Assessable Value + BCD) 2160 Customs House Account (GST Amount + BCD) -3160 Vendor Account (Transaction Value) -10000 GL Entries for import of goods from foreign vendor where input tax credit isn't available, will be as following:
Particulars Amount Fixed Asset Increase During the Year Account (Transactional Value+ BCD + IGST Amount) 13160 Customs House Account (GST Amount + BCD) -3160 Vendor Account (Transaction Value) -10000
Import of services from foreign vendor.
For example, purchase invoice is issued for INR 10000, (IGST @18%) has to be charged.
GST Calculation appears in the Fact Box as following:
Component Amount GST Base Amount 10000 IGST 1800 GL Entries for import of services from foreign vendor where input tax credit is available are as following:
Particulars Amount Services Account 10000 IGST Receivable (Interim) Account 1800 IGST Payable (Interim) Account -1800 Vendor Account (Transaction Value) -10000 GL Entries for import of services from foreign vendor where input tax credit isn't available are as following:
Particulars Amount Services Account 11800 IGST Payable (Interim) Account -1800 Vendor Account -10000
Import of Services from Import Associate Vendor.
For example, purchase invoice is issued for INR 10000, (IGST @18%) has to be charged.
GST Calculation appears in the Fact Box as following:
Component Amount GST Base Amount 10000 IGST 1800 GL Entries for import of services from import associate vendor where input tax credit is available are as following:
Particular Amount Services Account 10000 IGST Receivable Account 1800 IGST Payable Account -1800 Vendor Account -10000 GL Entries for import of services from import associate vendor where input tax credit isn't available are as following:
Particular Amount Services Account 11800 IGST Payable Account -1800 Vendor Account -10000
Hinweis
For an import in foreign currency, enter the Currency Code and check the exchange rate before posting. Posting converts customs duty and tax amounts to local currency.