Filling Details of High sea sales in GSTR 1 and 3b

High sea sales (HSS) are transactions where the original importer sells goods to a third party while they are in transit—after dispatch from the port of origin but before they clear customs in India.

Under the current GST framework, the treatment of these transactions is as follows:

1. Classification as "No Supply"

High sea sales are classified as "No Supply" under Schedule III of the CGST Act. Because they are not considered a "supply" of goods or services under the GST law:

• No GST is applicable on the sale transaction itself.

• You are not required to report these transactions in GSTR-1 or GSTR-3B as taxable or exempt supplies.

• Since it is a "No Supply" and not an "exempt supply," there is no requirement to reverse Input Tax Credit (ITC) under Rule 42 or 43 of the CGST Rules.

2. Reporting in Annual Return (GSTR-9)

While these transactions are excluded from your monthly GSTR-1 and GSTR-3B filings, they are generally reported in the Annual Return (GSTR-9). Specifically, they are typically disclosed as "No Supply" in Table 5(F).

3. Key Compliance Points

• IGST on Import: Even though the high sea sale itself is not taxable, the final buyer (who clears the goods through customs) is liable to pay Basic Customs Duty (BCD) and IGST at the time of importation.

• ITC Eligibility: The final buyer can claim the Input Tax Credit (ITC) of the IGST paid at the time of customs clearance, provided the goods are used for business purposes and all standard documentation (Bill of Entry, etc.) is in place.

• Documentation: Ensure you maintain the High Sea Sale agreement, the invoice, and other required documentation to prove the transfer of title occurred before the goods crossed the customs frontiers of India.

Summary: High sea sales are treated as "No Supply" (Schedule III). You do not need to report them in your monthly GSTR-1 or GSTR-3B returns. You may report them as "No Supply" in Table 5(F) of your annual GSTR-9.