Highseas sales
Santosh Shetty (IPCC, Asst Manager) (200 Points)
17 June 2018
High seas sales comes under exempt, nil rated or non GST?
5 Replies
Vinod Babu
(24191 Points)
Replied 17 June 2018
IS high Sea Sale Exempt from tax or taxable i.e IGST ?
Now before concluding this we need to discuss the two scenario here:-
Take the above said example for Buyer X , reproducing here
(Example: MR. A from India buy Goods from a dealer outside India, and after purchasing Mr. A transferred the Goods the Buyer Mr. X, by changing tittle in documents and before the goods physically reaching the custom port of India or say Indian Territory. )
Mr X, buyer is Located in India.
Mr X, buyer located outside India.
Now as per basic understanding we can presume following
Case 1 (Buyer and high sales supplier both in India)
i.e Mr. X and Mr. A both located In India- Here we can easily say YES IT should liable to IGST tax,
but question here is Who is liable to pay IGST I.E Mr. A or Mr. X or both
This is clear case of import and as per IGST ACT, The IGST on imported goods shall be levied.
Either X is liable to Pay
Or Is A is liable to Pay
Or Both are liable to Pay.
We will conclude it later.
Case 2 (When buyer outside India and high seas supplier in India)
i.e Mr. X located Outside India and Mr. A in India- Here some of us will say NO, it should not liable to IGST because goods not Physically not reached to India.
Also some of us may say YES, it should be taxable in India, because seller of goods i.e Mr. A in our example, trader of India.
Clause (2) of section 7 of IGST ACT- Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.
Assuming the above it is clearly define that it should be taxable. But again it is debatable -i.e has India has right to collect tax on this high-seas transaction
High Sea Sale is to be treated as inter state trade or commerce under S.3(3) Of IGST. However as per s.5(1) proviso, tax is chargeable at the point of import. As per S.4(1) of IGST, high sea sale can not be treated as intra state supply.
Direct import and/or thru High Sea Sales have become same post gst regime due to reason of payment of imposed gst on import made and to be claimed back as input credit in next month.
However in case of high sea sale, profit of vendor also gets added which is liable for higher absolute amount of custom duty as well as gst.
Now before concluding this we need to discuss the two scenario here:-
Take the above said example for Buyer X , reproducing here
(Example: MR. A from India buy Goods from a dealer outside India, and after purchasing Mr. A transferred the Goods the Buyer Mr. X, by changing tittle in documents and before the goods physically reaching the custom port of India or say Indian Territory. )
Mr X, buyer is Located in India.
Mr X, buyer located outside India.
Now as per basic understanding we can presume following
Case 1 (Buyer and high sales supplier both in India)
i.e Mr. X and Mr. A both located In India- Here we can easily say YES IT should liable to IGST tax,
but question here is Who is liable to pay IGST I.E Mr. A or Mr. X or both
This is clear case of import and as per IGST ACT, The IGST on imported goods shall be levied.
Either X is liable to Pay
Or Is A is liable to Pay
Or Both are liable to Pay.
We will conclude it later.
Case 2 (When buyer outside India and high seas supplier in India)
i.e Mr. X located Outside India and Mr. A in India- Here some of us will say NO, it should not liable to IGST because goods not Physically not reached to India.
Also some of us may say YES, it should be taxable in India, because seller of goods i.e Mr. A in our example, trader of India.
Clause (2) of section 7 of IGST ACT- Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce.
Assuming the above it is clearly define that it should be taxable. But again it is debatable -i.e has India has right to collect tax on this high-seas transaction
High Sea Sale is to be treated as inter state trade or commerce under S.3(3) Of IGST. However as per s.5(1) proviso, tax is chargeable at the point of import. As per S.4(1) of IGST, high sea sale can not be treated as intra state supply.
Direct import and/or thru High Sea Sales have become same post gst regime due to reason of payment of imposed gst on import made and to be claimed back as input credit in next month.
However in case of high sea sale, profit of vendor also gets added which is liable for higher absolute amount of custom duty as well as gst.
Santosh Shetty
(IPCC, Asst Manager)
(200 Points)
Replied 17 June 2018
sir, I wanted to know whether it is exempt or non GST
(Guest)
For high sea sales, the GST Council has decided that IGST on high sea sale (s) transactions of imported goods, whether one or multiple, will be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, any value addition accruing in each such high sea sale will form part of the value on which IGST is collected at the time of clearance. Thus the final buyer would be responsible for payment of GST on the full value of goods plus any value addition, at time of import.
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