Customes clerence

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 August 2015 Sir,

Our compnay made purhcase through HIGHSEA SALE. I have doubt

We made the payment of customs Clarence bill. But bill comes in the name of importer name.Liner not mentioned our company. But we made the payment . It is correct or not ? Service tax credit is applicable ?

Thanks and regards

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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28 August 2015 If a buyer wants to sell his consignment to a third party before arrival of goods but after sailing vessel from load port, such sale is known as high sea sale. In simple words, the ownership of goods is transferred, when goods are on transit.

Since high sea sale transactions are effected before arrival of goods to the country, no sales tax is applicable on imports under high sea sale. High sea sales are carried out outside territory of a country, hence it is not coming under the term ‘Imports’.
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the procedures of high sea sales with a simple example below:-

‘A’, an overseas seller supplies goods to ‘B’ an overseas buyer. Once after completion of necessary export procedures, A submits all necessary documents to his bank at seller’s place.

‘B’, enters in to an agreement of sale with C under high sea sale, once after movement of goods from the territorial border of exporter but before arrival of goods at the territorial border of India.

B accepts documents from his bank which has been sent by A through his bank. If the payment terms with A and B are on sight LC or DP, B remits invoice value of goods to A before collecting documents from bank. Incase of credit arrangements with A, B remits invoice value of goods to A as per the arranged credit period. The Bill of Lading (or airway bill) is endorsed by B and transfers the title of goods in favor of C.

B prepares invoice to C in local currency ( INR ). B delivers endorsed original Bill of lading (or airway bill), his invoice in local currency along with import invoice, packing list, certificate of origin, insurance certificate and other necessary documents if any for import clearance duly endorsed. A retains a copy of all documents which he delivers to C.

C files Bill of entry along with other import documents delivered by A with customs authorities. C pays necessary import customs clearance charges with import duty if any. B can also under take customs clearance and delivery to C, if B does not want to know the actual contract price of A and B. In this case, B is filing documents on behalf of C to hide the selling price between A and B.

Once after completion of import customs clearance procedures, C delivers a copy of bill of entry to B. B files the said bill of entry and other copies of import documents and high sea sale documents with his bank.