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IGST – High Sea Sale Taxable only once

There had been lack of clarity on whether IGST would apply to the two legs of transaction in an High Sea Sale – the first leg being the sale by the importer to the Buyer and the second leg being the clearance from Customs of the imported goods when IGST is liable to be paid.


The CBEC has in Circular No. 33 /2017-Cus, dated the 1st August, 2017 clarified as follows:

“GST council has deliberated the levy of Integrated Goods and Services Tax on high sea sales in the case of imported goods. The council has decided that IGST on high sea sale (s)transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, value addition accruing in each such high sea sale shall form part of the value on which IGST is collected at the time of clearance.”

Though this circular clarifies on the incidence of levy of IGST, one aspect that requires further clarity is whether the sale by the importer to the Indian buyer would be an “exempt supply” warranting the reversal of proportionate input tax credit availed.

Click to view CBEC Circular No. 33 /2017-Cus, dated the 1st August, 2017

Date : August 3, 2017.