Question

How to handle under GST and report in GST returns to the following transaction-
1. Purchase from outside India
2. And high sea sale to that before Import to that.

Answer


If a buyer wants to sell his goods/consignment to a third party before arrival of goods in territorial jurisdiction of importing country but after sailing of vessel from load port such sale is known as high sea sale. In other words ownership of goods is transferred when the goods are in transit.

According to Preamble of the GST Act, it is applicable to the whole of India i.e. it will become applicable after the goods enter territorial jurisdiction of India. In high sea sale, as the sale takes place before goods enter territorial jurisdiction of India, the law of GST is not applicable. The said law will apply to the buyer of goods at high sea who will ultimately file Bill of Entry to import the goods into India and at the time of import. He will have to discharge applicable Customs duty and Integrated tax. The procedure is also clarified vide Circular No. 33/2017-Customs dt. 01/08/2017. So it will be considered as Non GST sale.

Also in 28th Council meeting it is proposed to be included in schedule III. So for the time being it is included in Non GST Supply in GSTR-3B under Tile no. 3.1(e). (Reply dt.01/09/2018)