Notification on liability to Pay IGST on High Sea Sale
The CBEC has released circular to clarify doubts raised by Industry for liability to Pay IGST on High Sea Sale. We are enclosing the circular and summarizing the same quick understanding :
- High Sea Sale happens when an Importer sells goods to another customer before the goods are entered for Customs Clearance.
- In GST, all Inter-State transactions are liable to IGST.
- High Sea sale is treated under Inter-State Sale.
- So, industry had a doubt whether IGST would be payable Twice e at the time of clearance of Goods by the Final Buyer (last Buyer) during Customs clearance and again by the Original Importer to the Final Buyer!
- Now the Board has clarified that IGST shall be payable only once at the time of Customs clearance (filing of BOE) by the Last buyer.
- Every value addition in each stage shall form part of Valuation on which IGST shall be paid
- Entire chain of documents to be filed before Customs like Original invoice, High – Sea-Sale contract with importer, detail of Service charge/commission paid for the sale etc to establish link between original import price and the last transaction. Otherwise department may determine value as per customs valuation rule.