Section 21 of The Integrated Goods and Services Tax Act, 2017
Import of services made on or after the appointed day shall be liable to tax under the provisions of this Act regardless of whether the transactions for such import of services had been initiated before the appointed day: Provided that if the tax on such import of services had been paid in full under the existing law, no tax shall be payable on such import under this Act: Provided further that if the tax on such import of services had been paid in part under the existing law, the balance amount of tax shall be payable on such import under this Act. Explanation.---For the purposes of this section, a transaction shall be deemed to have been initiated before the appointed day if either the invoice relating to such supply or payment, either in full or in part, has been received or made before the appointed day.
Summary
- Any import of services made on or after the official start date (appointed day) of this law must pay integrated tax under this Act.
- This tax applies even if the transaction or deal for the imported services was started before the official start date.
- If the import tax was already paid in full under the old tax laws, no tax needs to be paid under this Act.
- If the import tax was only paid in part under the old laws, the buyer must pay the remaining balance of the tax under this Act.
- A transaction is officially started before the start date if either the invoice was received or any payment (in full or part) was made before that date.
Practical examples
FAQ
1. Do I have to pay tax under this Act if I already paid service tax under the old law?
If you paid the tax in full under the old law, you do not have to pay any tax under this Act. If you only paid in part, you must pay the remaining balance under this Act.
2. How does the law determine if an import of services was started before the appointed day?
A transaction is considered started before the appointed day if the invoice was received or if any payment (either full or partial) was made before that day.
Test yourself
Q1.Under Section 21 of The Integrated Goods and Services Tax Act, 2017, what is the tax liability for an import of services made on or after the appointed day if the transaction was initiated before that day?
Q2.Under Section 21 of The Integrated Goods and Services Tax Act, 2017, what is the tax liability if the tax on an imported service had already been paid in full under the previous tax law?
Q3.Under Section 21 of The Integrated Goods and Services Tax Act, 2017, what must be paid if the tax on an import of services was only paid in part under the old tax law?
Q4.Under Section 21 of The Integrated Goods and Services Tax Act, 2017, which of the following events deems a transaction to have been initiated before the appointed day?
Q5.Under Section 21 of The Integrated Goods and Services Tax Act, 2017, what is the term used to describe the old tax laws that were in force before this Act started?