Question10:

As per circular no 46/2017 of customs, it has been clarified the bonded sale is a supply and hence is taxable under GST law but the earlier view was that the same was exempted sale akin high sea sale. kindly advise 1) whether this circular is as per GST law or contravention of the same 2) whether it has retrospective effect i.e. applicable from 01st July 2017 3) what about the sale made from 01/07/2017 to 24/11/2017.

Answer:

To answer the question first we should know that what is high sea sale?
 It is if a buyer wants to sell his goods/consignment to a third party before arrival of goods in territorial jurisdiction of importing country but after sailing of vessel from load port such sale is known as high sea sale. In other words ownership of goods is transferred when the goods are in transit. According to Preamble of the GST Act, it is applicable to the whole of India i.e. it will become applicable after the goods enter territorial jurisdiction of India. In high sea sale, as the sale takes place before goods enter territorial jurisdiction of India, the law of GST is not applicable. The said law will apply to the buyer of goods at high sea who will ultimately file Bill of Entry to import the goods into India and at the time of import he will have to discharge applicable Customs duty and integrated tax. So the goods lying in bonded store will attract tax. Please note that the law was same earlier also (Reply dt. 11/12/2017)