# Import of Services — When is it Taxable?

Import of services is treated specially because of cross-border nature. Taxability depends on consideration and purpose.

## Decision Matrix

### A. Import WITH Consideration

Always taxable, regardless of whether for business or personal use.

### B. Import WITHOUT Consideration

Two sub-cases:

#### (i) From Related Person / Distinct Person, in course or furtherance of business

→ Taxable (covered by Schedule I, Entry 4).

#### (ii) Other cases (unrelated person, no consideration, or not for business)

→ Not a supply, hence not taxable.

## Summary Table

Scenario	Taxable?
With consideration, business purpose	Yes
With consideration, personal use	Yes
Without consideration, related person, business	Yes (Schedule I)
Without consideration, unrelated, or non-business	No

Worked example

### Example 1

Example 1: Indian company imports consulting services from US parent company without consideration, for business use. → Taxable under Schedule I (related person + business).

### Example 2

Example 2: An individual receives free advisory from a foreign friend (unrelated) for personal use. → Not taxable.

### Example 3

Example 3: A businessman pays ₹2 lakh to a foreign consultant for personal investment advice. → Taxable (consideration present).

⚠️ Common exam mistakes

Assuming all imports of services are automatically taxable — they are not, when both consideration is absent AND the relationship/purpose conditions are not met.
Confusing 'related person' test (requires business purpose) with general import test (any purpose if consideration exists).

Bare-Act text Section 7(1)(b) read with Schedule I Entry 4 · CGST Act, 2017 · click to expand

Section 7(1)(b): For the purposes of this Act, the expression 'supply' includes import of services for a consideration whether or not in the course or furtherance of business. Read with Schedule I, Entry 4.

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Import of Services — Taxability Matrix

Worked example

⚠️ Common exam mistakes