GST - Import / export of services – destination based consumption tax theory is back?
The issue of deciding what is import/export in respect of services has created a lot of disputes and discussions. Though there are separate rules to decide what constitutes export/import of a service, divergent views are taken by different formations. The Discussion Paper on GST proposes to follow the destination principle to decide the basis on which the revenue will accrue to a state.
The paper states:-
GST on Imports: The GST will be levied on imports with necessary Constitutional Amendments. Both CGST and SGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off will be available on the GST paid on import on goods and services.