dear sir,
i want to ask you my friend is importing knitting machine from china. and he sold the machine on high sea sale basis against epcg, by adding 50-60% from actual value. the custom officer is not allowing that coz of high percentage. so is there any thing written in custom rules that he cant do this. i think minimum is 2%. so what can he do. and what type of action they can do.
Customs: Price in case of High Sea Sales
High Sea sales (HSS) is a sale carried out by the carrier document consignee to another buyer while the goods are yet on high seas or after their dispatch from the port/ airport of origin and before their arrival at the port / airport of destination.
Price, relevant for customs valuation u/s 14(1) is the price for delivery at time and place of importation. In case of high sea sales, price charged by importer to assessee would form the assessable value and not the invoice issued to the importer by foreign supplier.
If the purchase is on High Seas, the selling price will be naturally higher than the price at which the original buyer imported the goods. However, even if price is lower, the duty will be payable on price at which goods are sold on high sea basis to final importer. Original price at which original buyer purchased the goods cannot be the basis for valuation.
CBEC vide Circular No. 32/2004-Cus. Dated 11-05-2004 has clarified that the valuation should be on basis of last sale price. Even if there are more than one High Sea Sales, the last sale price should be taken for purpose of valuation, as that is the price at which final importation has been caused. If importer is unable to produce original invoice, High Sea Sale contract etc. to be establish link, valuation can be done on basis of Valuation Rules. Earlier, as per public notice no. 145/2002 dated 0003-12-2002, Customs House had prescribed addition of 2% towards High Sea Sale commission to original value for assessment of goods on high seas sale basis.
High Seas Sales agreement to be on stamp paper and dated after ship commences journey - As per CC, ACC, Mumbai Facility Notice No. 18/2012 dated 22-05-2012 [ 280 ELT T-15], High Seas Sale agreement should be on stamp paper of ₹ 100/- (in Maharashtra). The agreement date should be after the ship has started sailing.
HSS is considered as a sale carried out outside the territorial jurisdiction of India. Accordingly, no sales tax is levied in respect of HSS. The customs documents (B/E) is either filed in the name of HSS buyer or such B/E has an endorsement indicating HSS buyer's name.
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