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Shipping bill scrutiny and csp on export profit

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Jayanta Bandyopadhyay

418 Points Posted on 12 September 2023

While filing shipping bill alongwith Proforma Invoice, Kolkata Customs is asking for Purchase Invoice of subject shipment. Since we are having many sister LLPs and Companies, and this is sourced from Group Company [ export thru another sister concern] , would we invite any problem? Additionally, we have marked up 55% profit on export invoice. Is there any cap on profit? After all, we are earning forex and remittance thru banking channel only.

Kindly advise.

Regards

Jayanta Bandyopadhyay

Kolkata

Replies (2)

Quick Summary

This discussion addresses concerns about Kolkata Customs requesting purchase invoices for shipments involving sister companies. The key issue is whether sourcing from a group company and declaring a 55% profit margin will cause problems. The advice given is that transactions between associated entities must be at 'arm's length price' to prevent valuation issues, and the relationship between seller and buyer must be declared to Customs. The profit margin or forex earnings are considered irrelevant in this context.

CS M Pota

Company Secreatary

2613 Points Posted on 19 September 2023

If sale and purchased ,including import and export, between sister concern or associated person the transaction should be at arm lenght price to avoid over and under valuation problem.Proper declaration of the relation betwee seller and buyer should also be given to the Customs in case of import export transaction.

Here quantum of of profit or earning of foreign currency is irrelevant.