ITC reversal on high sea sale

[Kaustubh Karandikar]

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?

AI Summary

High Sea Sales Classified as 'No Supply' Under Schedule III; No ITC Reversal Required, Clarifies GST Implications A discussion on the Goods and Services Tax (GST) implications for high sea sales, particularly regarding Input Tax Credit (ITC) reversal, reveals that transactions classified as 'no supply' under Schedule III, including high sea sales, do not require ITC reversal. Experts clarify that the original importer is not liable for customs duties or IGST on high sea sales, and only the party filing the customs declaration for home consumption clearance must pay these taxes and can claim IGST credit. The forum also discusses the reporting requirements for high sea sales in GST returns and clarifies that the provisions apply to goods, not services.