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ITC reversal on high sea sale, Goods and Services Tax - GST

Issue Id: - 115425
Dated: 13-9-2019
By:- Kaustubh Karandikar
ITC reversal on high sea sale

  • Contents

In case of Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India, the same will not be treated as supply w.e.f. 01.02.2019 and therefore, proportionate ITC under Rule 42 is not required to be revered from 01.02.2019. Whether, in case of ‘High Sea Sale’ also same logic is to be applied and no ITC reversal or even today also proportionate ITC is required to be reversed for High Sea Sale by the first importer who is selling the goods when they are on high seas?

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Showing Replies 1 to 5 of 5 Records

1 Dated: 14-9-2019

Issued by C.B.E. & C. as on 1-8-2019 for education purpose

9.4.26 Recent Law amendments w.e.f. 1-2-2019 : The following transactions to be treated as no supply (no tax payable) under Schedule III :

a. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India;

b. Supply of warehoused goods to any person before clearance for home consumption;

c. Supply of goods in case of high sea sales

If High Sea Sale is 'no supply', no reversal is required.

2 Dated: 14-9-2019
By:- Rajagopalan Ranganathan


When an importer sells imported goods on high seas sales basis to a third party he is not required to pay duty/tax, namely, customs duties and IGST. Hence there is no question of taking credit or reversing credit by the original importer. Only the person who filed customs declaration with Customs authorities for the purpose of clearance of the imported goods for home consumption is required to pay customs duties and IGST. Only this person is eligible to take credit of IGST.

3 Dated: 14-9-2019
By:- Alkesh Jani


I agree with both the experts, in this regards Circular No. 33/2017-Cus dated 01.08.2017, may be referred. Moreover, supply of goods from non-taxable territory to another place in non-taxable territory will not apply to High Seas Sale.


4 Dated: 16-9-2019
By:- Shilpi Jain

Just mentioning the provision based on which the conclusion is drawn that high sea sales is not an exempt supply w.r.t. credit reversal.

Explanation to section 17(3) of the CGST Act, 2017

[Explanation. - For the purposes of this sub-section, the expression “value of exempt supply” shall not include the value of activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.]

High sea sale is a schedule III item under below entry

8 (b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.]

5 Dated: 18-9-2019
By:- Madhavan iyengar

The provisions of law have been explained very well by all the experts

would like to add on reporting side how the high seas sales is required to be reported in GSTR-1 (High seas sales is categorised as a no supply )

a) GSTR-1 in table 8 column 4 - Non GST supplies

Though in GSTR-1 they have so far not mentioned the term no supply

b) in GSTR-9 under table 5 (F) Non-GST supply (includes no supply‘)

c) In GSTR-3B 3.1(e) Non gst outward supplies


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