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GSTInvoice

GST Compliance

GST on Imports in India 2026 — IGST, RCM, and Invoice Requirements

Imports into India attract IGST in addition to basic customs duty. For goods, IGST is paid at the port of entry. For services received from foreign suppliers, IGST is paid by the Indian recipient under the Reverse Charge Mechanism (RCM). Both allow ITC claims for registered businesses.

By Arjun Sharma · GST & Tax Compliance Specialist Reviewed for GST accuracy
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Import GST — Goods vs Services

Import Type GST Mechanism Rate ITC Available
Goods import IGST at customs (Bill of Entry) As per HSN code Yes (for businesses)
Services from foreign supplier (OIDAR) RCM by Indian recipient 18% Yes (for B2B)
Software licenses from abroad RCM by Indian recipient 18% Yes
Import by individual (non-business) IGST at customs As applicable No ITC

RCM on Imported Services

When an Indian business imports services (consulting, software, cloud hosting) from a foreign supplier, GST is not collected by the foreign vendor. Instead, the Indian recipient pays IGST under RCM directly to the government through GSTR-3B. ITC of the same amount can be claimed in the same return. Example: A Delhi startup pays $10,000/month to AWS US account. At ₹83/dollar = ₹8,30,000. IGST at 18% under RCM = ₹1,49,400 payable by the startup. ITC of ₹1,49,400 is claimable in the same return.

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FAQs

Is IGST paid on import goods claimable as ITC?

Yes. IGST paid at customs on imported goods is available as ITC for registered businesses. The Bill of Entry serves as the ITC document.

What is RCM on imported services?

Reverse Charge Mechanism requires the Indian recipient to pay IGST on services received from foreign suppliers. The foreign supplier does not charge GST. The Indian business self-assesses and pays 18% IGST.

Does an Indian company need to raise an invoice for imported services?

Yes — for RCM purposes, the Indian recipient must issue a self-invoice in their own name, recording the import of service and the IGST to be paid under RCM.

Are imports by unregistered businesses taxed differently?

For goods: IGST is collected at customs regardless of GST registration (no ITC for unregistered). For services: Unregistered individuals importing services for personal use are generally not required to pay RCM GST.

Why Businesses Stop Using Excel for GST Invoices

Manual GST calculation mistakes

One wrong CGST/SGST split or a misapplied rate triggers notices and ITC denial for your buyer.

Slow invoice creation

Copying last month's Excel file, updating dates, recalculating — 20 minutes for what should take 30 seconds.

Formatting breaks on every device

Excel invoices look different on every printer and PDF converter. Clients complain about unreadable layouts.

No easy sharing or payment link

Sending PDFs over WhatsApp with no way for clients to pay directly slows down collections.

Incorrect tax type (IGST vs CGST+SGST)

Excel can't auto-detect intra vs inter-state supply. Wrong tax type = ITC rejected for your buyer.

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Disclaimer: The information in this article is for general informational purposes only and does not constitute professional tax, legal, or financial advice. GST rules and rates are subject to change. Consult a qualified CA or tax professional before making compliance decisions.

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