Central Board of Excise and Customs has clarified that high-sea sales are not liable to IGST under the Integrated Goods and Services Tax Act, 2017. The question as to whether high sea sales of imported goods would be chargeable to IGST twice, i.e. at the time of Customs clearance under Section 3(7) of the Customs Tariff Act, 1975 and also separately under Section 5 of the Integrated Goods and Services Tax Act, 2017, has been answered in favour of the importer.
Circular No. 33/2017-Cus., dated 1-8-2017, issued for this purpose, takes note of a decision of the GST Council that IGST on high sea sale transactions of imported goods, whether one or multiple, is to be levied and collected only at the time of importation, when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. The Circular states that the decision of the Council is reflected in the provisions of Section 3(12) of Customs Tariff Act.
Importers would be required to furnish all documents to establish link between the first contracted price of the goods and the last transaction. The department can however reject transaction value if there is any doubt and determine the value in terms of the Customs Valuation Rules.