High sea sales between two countries

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Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2018 I have an order from Turkey. I want to buy the goods from China and then sell it to Turkey. Can this be done under High Sea Sales? If yes, how do I enter in HSS agreement, as it is an overseas buyer?

Or if there is any other way that I can directly export from China to Turkey, please let me know.

Anmol Davesar

Anmol Davesar (Expert)
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03 May 2018 you shud consult with a export consultant who deals with export imports. This matter is of utmost care.

Querist : Anonymous

Querist : Anonymous (Querist)

03 May 2018 how do I enter into HSS agreement with overseas buyer?

Anmol Davesar

Anmol Davesar (Expert)
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03 May 2018 http://howtoexportimport.com/A-simple-tutorial-on-high-sea-sale-procedures-and--392.aspx

Querist : Anonymous

Querist : Anonymous (Querist)

03 May 2018 thanks for sharing the link. But the information on that is more specific to India. In my case, the HSS buyer is from Turkey. What should be the procedure that needs to be followed?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 May 2018 Yes can directly export from China to Turkey,

See the arrangement given here.

Let me explain Triangular Shipment with an example to make you easily understand.Triangular Shipment.

You are situated in Mumbai, India. You have obtained an order from a buyer called ABC from Yang Min, China. As per your contract with your buyer in China, you need to ship the goods to a party called XYZ New York, USA. Here, the purchase order from final buyer has been obtained by ABC from China and he procures goods from you in India. You will be shipping goods to the port of XYZ at New York. This is one of the examples of ‘triangular shipment’.

I will explain once again to make easier on the above example of Triangular Shipment.

As far as you are concerned, your buyer is ABC and you will receive foreign payment from your buyer ABC in China. All your accountability is with ABC only and you have no connection with XYZ. In turn, ABC will be receiving purchase order from XYZ. ABC receives amount of sale of goods also from XYZ. ‘Certificate of origin of goods under triangular shipment’ is obtained from the final manufacturer of goods, here in this case ‘you’ situated in India.

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Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2018 thanks for your valuable information @CA R SEETHARAMAN sir.

can you please confirm if triangular shipment comes under export category? And can I take all the benefits of exports from Government under this type of trade?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 May 2018 It is an export from China benefits are available only for exports from India.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 May 2018 It is an export from China benefits are available only for exports from India.

Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2018 this is very similar to High Sea Sales. I will raise an invoice when the consignment is in high seas.

Can you please clarify if High Sea Sales is only for India? Or can we have HSS buyer from overseas?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 May 2018 This is not similar to high sea sale. High sea sale is only for goods imported to India.

Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2018 thanks for your reply sir.

Can you please tell as how do I save tax in this transaction? Like we have in exports where we don't pay tax.

How should I show that this is an export?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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05 May 2018 No GST payable on this transaction. This is not an export from India. This is an export from China.

CS M Pota

CS M Pota (Expert)
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05 May 2018 It is called MERCHANTING TRADE IN THE INTRNATIONAL TRADE.The Transaction is Import and Export of India without any Custom formalities because no goods come in India or goes out of India but,foreign currency comes in to india from export transaction and goes out of India for Import transaction.You may refer my Article on MERCHANTING TRADE IN THE INTERNATIONAL TRADE on www. Tax management India.com.Actually ,Ihade posted this Article on CACLUBINDIA,COM but some how they did not publish so finally i uploaded on www. Tax management India.com.

V K Vijayaraghavan

V K Vijayaraghavan (Expert)
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05 May 2018 Can you send me the mail on merchandising trade in the international trade
vijivkv1955@gmail.com

CS M Pota

CS M Pota (Expert)
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05 May 2018 Please you visit www. Tax management India.com and search in the Article "Malay Pota" you can have the Article.

CS M Pota

CS M Pota (Expert)
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05 May 2018 otherwise you visit www. Tax management India.com and search "Malay Pota" in search. You can have the said Article.

Querist : Anonymous

Querist : Anonymous (Querist)

06 May 2018 thanks for your valuable information.

for Merchanting trade in International trade, what all documents should I submit in the bank to make the transactions (for making payment & receiving payment)?

How should I show this in GST? Any tax applicable in this trade?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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06 May 2018 Produce sale order and invoice to bankers. GST not applicable but profit is taxable under income tax. No need to show this transaction in GST return as the trade happened out side India.

CS M Pota

CS M Pota (Expert)
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07 May 2018 It will not work if you produce sales Order and invoice to your banker. You contact your banker and inform about your transaction because,you are importing and exporting the same goods at the same time and the goods neither physically comes in India nor goes out side India,so both the transaction Import as well as Export must be routed through the same banker (Authorized Dealer) which means suppose if you receive the export proceeds in State Bank of India you have to pay for Import from the State Bank of India ( same Branch )only.For export Transaction you have to submit all the Post shipment Documents what are required to be submitted in normal export like Invoice ,Packing list Airway bill if export is by Air, or Bill of lading certificate of Origin etc.You will have also to submit any other documents as may be required by your banker because all banks have different requirement for documents.

V K Vijayaraghavan

V K Vijayaraghavan (Expert)
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21 May 2018 On line Cos like AMAZON.COM allow Indian individuals also sell through their platform and warehouse and sell goods imported from china by Indian traders directly to USA . They take payment thru Cr card/ pay pal and then when items are sold in USA remit net proceeds to the Indian trader into his Indian bank in USD,
What si formality for this with RBI/ Indian bank when money is received from amazon.com

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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21 May 2018 Any sale export to foreign countries payment should be received in foreign currency in to Indian bank account. For small amounts pay pal remittance is allowed.