Sales Tax on HSS Sale material?

[Guest]

Dear Sir,

I have some query regarding High seas Sale

I want to sale an import shipment on HSS to Gov customer. Customer is also ready to buy it on HSS.

Customer is telling, we will sign HSS agreement and BoE will be filled in name of customer (HSS Buyer) but all destination activity (custom clearance, duty payment, delivery at customer door) will take care by us (HSS Seller) and customer (HSS buyer) will give reimbursement of all charges against our (HSS seller) bill. Customer will provide all relevant document (GATT, KYC, CHA Authorisation letter) for getting custom clearance in name of HSS Buyer. and reimburse all charges on actual basis to us.

Issue:-

As per some Tax expert this transaction is not completed since all destination activity is done by Seller (HSS Seller). they are telling once HSS agreement get signed after that all destination activity should be done by HSS buyer only.

Please let me if we will support to our customer, since they gov employee and they don't want take any headache,

Is there realy Sales tax department could be asked for Tax payment for this transaction. Please let me know whether this transaction can be done or not. if possible, please provide me notification copy as well.

Sunil Pandey

8554981089

[YAGAY andSUN]

There is no VAT/CST/Sales Tax Applicable on HSS.

[Mahir S]

Yes Sir, once HSS agreement gets signed , then all destination activity is to be done by HSS buyer only.

AI Summary

High seas sale: VAT/CST not leviable, but destination clearance should be performed by the HSS buyer. The exchange concerns a High Seas Sale where the bill of entry is to be in the buyer's name but the seller would handle customs clearance, duty payment and delivery and seek reimbursement. The primary legal points: genuine HSS transactions are not subject to VAT/CST/sales tax; however, after signing an HSS agreement destination activities should be performed by the HSS buyer, and seller-conducted destination formalities may create characterisation and compliance risks.