Taking Credit of IGST Customs duty paid on import of goods

To avail IGST (Integrated Goods and Services Tax) credit when the import duty is paid by the exporter (seller) and included in the price of the material imported, follow these steps: 1. *Ensure eligibility*: Verify that the imported goods are eligible for IGST credit. 2. *Obtain documents*: Get the following documents from the exporter (seller): - Bill of Entry (BoE) - Commercial Invoice (CI) - GST Invoice - Certificate of Origin (if applicable) 3. *Determine IGST amount*: Calculate the IGST amount paid on the imported goods based on the import duty paid by the exporter. 4. *Reverse charge mechanism*: Since the import duty is included in the price, you (the importer) are liable to pay IGST under the reverse charge mechanism. 5. *File GSTR-3B*: Report the IGST liability in your GSTR-3B return for the relevant month. 6. *Avail IGST credit*: Claim the IGST credit in your GSTR-3B return, ensuring that the credit is availed in the same month as the liability is reported. 7. *Maintain records*: Keep all relevant documents and records to support the IGST credit availed.

Import IGST credit is generally available to the importer only when the Bill of Entry identifies the importer as the importer of record and the IGST is paid to Customs against that import. The fact that the exporter bears or reimburses the cost does not, by itself, prevent credit if the Bill of Entry and import records are in your name and the other ITC conditions are met.

If the exporter is the importer of record and pays the import IGST under its own Bill of Entry, you cannot claim that credit merely because the duty cost is included in your purchase price. You would need a separate taxable domestic supply to you, with a valid tax invoice and GST charged, to claim ITC on that supply; the exporter’s Bill of Entry is not your credit document. Check the Bill of Entry, importer details and ICEGATE/GSTR-2B records to establish which case applies.

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The key factor is not who bears the import cost, but who is recognised as the importer in the Bill of Entry.

You can claim IGST ITC if the Bill of Entry identifies your business as the importer, the import IGST has been paid to Customs and the other conditions under Section 16 of the CGST Act are satisfied.

If the Bill of Entry is issued in the exporter's name and the exporter is the importer of record, you cannot claim that ITC merely because the IGST cost is included in your purchase price.

Alternatively, a separate domestic taxable supply supported by a valid GST invoice may allow ITC, subject to applicable conditions.