High seas sale concept in gst era

501 views 2 replies

Abhishek Roy

Senior Finance Executive

92 Points Joined December 2016

Hi..........,

We have entered in a contract agreement of supply of railway components to DMRC (Delhi Metro Rail Corporation Ltd) which is being imported from outside India before it reaches the Indian custom frontier.

We are utilizing our own IEC licence code to get the components imported but here lies a confusion about the taxability in GST, though it is referred by CBEC as it liable to IGST at the time of Import, but it is difficult to understand how to maintain our contract price.

following points to be noted :

1) The Bill of Entry is in the name of our concern as per our IEC License code.

2) We have to add some monetary consideration to the total imported(liable to IGST) amount in order to attain our Contract value stipulated in our agreement with DMRC.

I have gone through the circular issued by CBEC (Circular No. 33 /2017-Cus) but could'nt make out the actual concept.

Please suggest will the High sale be taxable/exempted from our point....?

Replies (2)

VENGETRAO K

Practicing Company Secretary

41 Points Joined June 2007

Import in your name is subject to IGST,no doubt; and when you sell it you will have to raise Tax Invoice, and the buyer will get the benefit of ITC(assuming) for the tax paid. Output tax liability are adjusted against ITC. So the contract price will not be affected.

Abhishek Roy

Senior Finance Executive

92 Points Joined December 2016

Hi,

Its ok but the problem arising is that if we raise a tax invoice will we have to show it as exempted sales............?

Because as per High seas sale the tax to be imposed only once that also at the time of Importing the goods, tell me how will I be able to meet up the excess amount along with total import to meet the contract price, now if we consider the same then we have a possibility to claim refund of IGST from custom authorities.

What do you suggest, do I am going in the correct path....?