TaxTMI 
TaxTMI 
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?
ITC reversal on high sea sale
13 Sep 2019 
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High sea sale no-supply classification: ITC reversal not required; only importer clearing for home consumption may claim IGST credit
High sea sales are classified as no supply under Schedule III and therefore do not trigger reversal of proportionate ITC by the first importer; IGST liability and the corresponding credit eligibility attach to the person who clears the goods for home consumption, and Schedule III transactions are excluded from the value of exempt supplies for credit apportionment, while reporting of high sea sales is to be made as non-GST or no-supply in periodic returns. (AI Summary)
High sea sales are classified as no supply under Schedule III and therefore do not trigger reversal of proportionate ITC by the first importer; IGST liability and the corresponding credit eligibility attach to the person who clears the goods for home consumption, and Schedule III transactions are excluded from the value of exempt supplies for credit apportionment, while reporting of high sea sales is to be made as non-GST or no-supply in periodic returns. (AI Summary)