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Clarification on High sea sales in GST

Clarification on High sea sales in GST

Clarification on High sea sales in GST by CBEC vide  Circular No. 33 /2017-Cus. It was a contentious issue from very beginning of GST regime. Now CBEC has clarified this matter. IGST will be levied on all High sea sales.

“High Sea Sales is a common trade practice whereby the original importer sells the goods to a third person before the goods are entered for customs clearance. After the High sea sale of the goods, the Customs declarations i.e. Bill of Entry etc is filed by the person who buys the goods from the original importer during the said sale”

Taxability of High sea sales in GST: 

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.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 this total value IGST is collected at the time of clearance.

Thus we can say that in case of High sea sales GST will be levied only once. When the importer will file the documents in customs then GST will be levied.The importer (last buyer in the chain) would be required to furnish the entire chain of documents such as

  • Original Invoice,
  • high-seas-sales-contract,
  • details of service charges/commission paid etc.

This will establish the connection between the first contracted price and last transaction value.

In case of a doubt regarding the truth or accuracy of the declared value. The department may reject the declared transaction value. Determination the price of the imported goods as provided in the Customs Valuation rules may apply.


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Profile photo of CA shafaly girdharwal CA shafaly girdharwal


New Delhi, India

CA Shaifaly Girdharwal is a GST consultant, Author, Trainer and a famous You tuber. She has taken many seminars on various topics of GST. She is Partner at Ashu Dalmia & Associates and heading the Indirect Tax department. She has authored a book on GST published by Taxmann.

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