Does Import of Service liable for Custom duty

Hi Mack! You’re on the right track, here’s a clear breakdown:

1. Customs Duty on Import of Services?
   No, customs duty applies only to the import of goods (tangible items). Services are intangible and don’t cross customs physically, so customs duty is not levied on imported services.

2. Is IGST applicable on Import of Services?
   Yes, IGST is payable on imported services under the GST law. The Indian recipient (like your Bengaluru IT company) has to pay IGST under the reverse charge mechanism.

3. Customs Duty vs IGST
   Customs duty still exists on goods imports and is separate from IGST. On goods imports, customs duty is charged first, and then IGST is calculated on the value plus customs duty.
   But for services, there’s no customs duty, only IGST.

4. Is Customs Duty replaced by IGST?
   No, customs duty is not replaced by IGST. Both coexist but apply differently:

• Customs duty on goods imports

• IGST on goods and services imports

So your understanding is mostly correct — customs duty continues for goods, IGST is additional tax on both goods and services, and for services, only IGST applies.