Section 21 of IGST Act 2017: Import of Services from the ‘Appointed Day’

Provisions under Section 21 of the Integrated Goods and Services Tax (IGST) Act, 2017 relating to “Import of services made on or after the appointed day”, are as under:

Section 21 of IGST Act 2017: Import of services made on or after the appointed day (CHAPTER IX – MISCELLANEOUS)

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.

Amendments History:

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Commentary on Section 21 of the IGST Act

Section 21 of the Integrated Goods and Services Tax (IGST) Act, 2017, deals with the taxation of import of services made on or after the appointed day. The appointed day refers to the date when the IGST Act came into force. The key points of this section are as follows:

i) Tax liability: Import of services made on or after the appointed day is liable to tax under the provisions of the IGST Act, irrespective of whether the transactions were initiated before the appointed day. This means that even if the transaction was initiated before the IGST Act came into force, it would still be subject to taxation under the new regime.

ii) Tax already paid under existing law: If the tax on such import of services was already paid in full under the existing law (i.e., the previous tax regime), no additional tax is payable under the IGST Act. This provision is meant to avoid double taxation of the same transaction.

iii) Partial tax payment under existing law: If the tax on such import of services was paid partially under the existing law, the balance amount of tax is payable under the IGST Act. This ensures that the tax liability is fulfilled according to the new tax regime.

iv) Explanation of ‘initiated’ transactions: A transaction is considered to have been initiated before the appointed day if either the invoice related to the supply or the payment, either in full or in part, was received or made before the appointed day. This clarification helps determine if a transaction is subject to the provisions of Section 21.

In summary, Section 21 of the IGST Act, 2017, clarifies the tax treatment of imported services made on or after the appointed day. It ensures that such services are taxed under the IGST Act, while also considering any taxes already paid under the previous tax regime to avoid double taxation.

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Note: The IGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended through IGST Extension to J&K Act 2017, IGST (Amendment) Act 2018. Finance Act 2019, Finance Act 2020, Finance Act 2021, Finance Act, 2022 and Finance Act, 2023, including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective IGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.