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Cus - Export of non-basmati rice - Notification 20/2023 insofar as it denies the benefit of the transitional arrangement as contained in para-1.05 of the FTP 2023, is bad in law: HCCus - Refund of SAD - 102/2007-Cus - Areca Nut and Supari are one and the same - Objections with regard to name, nature and status of importer or buyers or the end use of goods purchased by them etc. are extraneous: HCCX - Interest on Refund - Since wrong order annexed by petitioner in paper book, Bench is unable to proceed further - Petition is dismissed with liberty to file a fresh one: HCGST - No E-way bill - When petitioner imports machinery and after Customs clearance, transports same to his own factory, it cannot be said that such a transportation would fall within the definition of term 'supply' - Penalty imposable under second limb of s.129(1)(a): HCGST - Fix responsibility on officers who allowed BG to lapse - Petitioner not justified in not renewing BG - Cost of Rs.15 lacs imposed, to be paid to PM Cares Fund: HCGST - Since the parties agree that petition can be disposed of on the basis of records available before Appellate Authority, petitioner is directed to enclose all documents filed before Appellate Authority in a compilation, in form of a paper book: HCWrong RoadST - Whether any service is used for personal consumption or not is certainly question of fact and being question of fact, no substantial question of law arises: HCGovt proposes to amend Geographical Indication of Goods Rules; Draft issued for feedbackST - If what has been paid as tax is without authority of law, Revenue should refund the same - Denial of credit would result in the whole exercise being tax neutral: HCWarehousing Authority notifies several agri goods to be stored in only registered warehousesST - Even if the petitioner may have a case on merits, it is best left to be decided by the Appellate Authority under the hierarchy prescribed under the FA, 1994: HCUS FDA okays Eli Lilly Alzheimer’s drugGST - Petitioner challenges jurisdiction of assessing officer - Petitioner is entitled to file an appeal u/s 107 by availing an alternate efficacious remedy: HCFive from Telangana killed in car accident on Pune-Solapur HighwayGST - Existence of an alternative remedy is a material consideration but not a bar to the exercise of jurisdiction: HCHush money case against Donald Trump - Sentencing deferred to Sept 18GST - It is open to a trader to take goods by whichever route he opts, unless the law otherwise requires, destination point being intact: HCDeadly hurricane Beryl smashes properties in JamaicaGST - Conclusion that taxable person is providing a service to supplier while taking the benefit of a discount by facilitating an increase in the volume of sales of such supplier is ex facie erroneous and contrary to the fundamental tenets of GST law: HCIsrael claims 900 militants killed in Rafah since May monthGST - Order expressly records that personal hearing notice was returned with endorsement 'no such person at address' - Since petitioner has shifted to a new premises, it is just and necessary to provide an opportunity to contest demand: HC116 die in stampede at UP ’Satsang’I-T- Application for revision of order dismissed in limine on grounds of delay; case remanded for re-consideration: HCWe are deepening economic ties with India, says US officialI-T- As per Section 119(2)(b), power to condone applications relate to claims for amount exceeding Rs 50 lakhs are to be considered by CBDT; however it is impermissible for CBDT to pass order on merits: HC8 Dutch engineers build world’s longest bicycle - 180 feet, 11 inchesI-T- Additions framed u/s 68 for unexplained income & u/s 69 for unexplained expenditure not tenable where complete transactional details are furnished & not doubted: HCRailways earns Rs 14798 Crore from Freight loading in June monthI-T- Delay in filing ITR is per se insufficient reason to estimate assessee's profit @15% on turnover, more so where audited financial report is filed in timely manner: ITATMoD inks MoU to set up testing facilities in Unmanned Aerial System in TN Defence Industrial CorridorI-T- For invoking section 69A, assessee should be found to be owner of any money, bullion, jewellery or other valuable article & which is not recorded in the books of account: ITATGovt proposes Guidelines for ethical approach to Coal MiningI-T- TDS credit can be allowed based on AIS, where details pertaining to TDS, advance tax & other payments are reflected in Form 26AS: ITATVaishnaw to inaugurate Global IndiaAI Summit 2024I-T- Lending money with the primary intention of earning interest can be considered a business activity, but nature and manner of lending, as well as the frequency, should be taken into account: ITAT
 
High Seas Sales in GST Regime

APRIL 26, 2017

By G Mohana Rao

HIGH Seas Sale is a sale wherein goods are still in high seas on its way to its destination. In such cases, the buyer as well as the seller are within the country but the goods are in high seas i.e. in-transit. The issue is whether such a sale is a local sale and if so, whether VATis leviable on such a sale is the key differentiator on the decision of whether to buy the goods after their import in India or on high seas.

So far, no VAT is being paid on High Sea Sales since the sale is beyond Indian boundaries. Now the concern of the trade is what after GST?! How the high seas sales are to be treated in the GST regime?! A lot of concernandconfusion is prevailing in the minds of the trade.

The Advisory Opinion 14.1 of the GATT Valuation Code stipulates that such transaction would constitute an   international transfer of goods.   The latter transaction which led to the import would be the relevant transaction for assessment under Section 14 read with the Rule 4 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 . CBEC Circular No. 32 of 2004 may also be referred in this respect.

In the GST regime too, the situation remains the same as to the nature of transaction i.e. ‘international transfer of goods'. In my humble opinion and in view of the Advisory Opinion 14.1 of the GATT Valuation Code, thehigh seas sales may have to be considered as international transfer of goods and as such shall not be taxed.

But, Proviso to Section 5(1) on Levy of IGST,provides that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are to be levied on the said goods under section 12 of the Customs Act, 1962.

In line with the same, the Customs Act, 1962 has been proposed to be amended in the recent proposed legislation (passed by Lok Sabha). Accordingly, Section 3(7) of the Customs Act, 1962 states:

“(7) Any article which is imported into India shall, in addition, be liable to integrated tax at such rate, not exceeding forty per cent as is leviable under section 5 of Integrated Goods and Services Tax Act, 2017 on a like article on its supply in India, on the value of the imported article as determined under sub-section (8).”

Furthermore,section 3(8) of the Customs Act, 1962 stipulates that value of the goods for the purpose of levying Integrated tax shall be the assessable value besides Basic Customs Duty (BCD).

Section 3(9) provides that any article which is imported into India shall, in addition, be liable to goods and services tax compensation cess at such rate, as is leviable under section 8 of the Goods and Services Tax (Compensation to States) Cess Act, 2017 on a like article on its supply into India, on the value of the imported article as determined under sub-section 10 of section 3.

However, due to taxation of the complete supply chain and GST being the destination based consumption tax, there would be one major impact. Integrated tax (IGST) would in any case be levied on the full value of the goods including the high sea sale, if any, and the same will move along with the goods in further components of the supply chain. Thus, saving any state levies will be out of question. It would be a completely revenue neutral situation. The incentives for choosing the high sea sale route will simply evaporate and the number of such sales should drastically reduce once GST arrives on the scene. The buyers will resort to high seas route only in case of business need....for instance to ensure dispatch or to escape from hassles of import formalities etc. It appears that with the implementation of multi stage taxing of complete supply chain,many such creative accountings of the past will lose relevance.

(The author is Partner, Elysian Tax Advisors, Mumbai and the views expressed are strictly personal.)

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(DISCLAIMER : The views expressed are strictly of the author and Taxindiaonline.com doesn't necessarily subscribe to the same. Taxindiaonline.com Pvt. Ltd. is not responsible or liable for any loss or damage caused to anyone due to any interpretation, error, omission in the articles being hosted on the site)

 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: VAT law not concerned with High Sea sales

I write this comment for the limited purpose of pointing out that there can be no incidence of VAT on high sea sales, as Article 286 of the Constitution reserves inter-State sales or purchases and purchase or sale in the course of import or export to the Parliament. Hence, CST Act, 1956 is the appropriate law to be referred, not VAT laws.

Posted by Gururaj B N
 
Sub: High Seas Sales in GST Regime

Nicely written article.

Posted by Samir Sinha
 

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