Highsease sale but clearing charges paid by importer

Hey Ashish! About your High Seas Sale question where the importer paid clearing charges:

Key Points:

• High Seas Sale means goods are sold while still on the high seas (in transit) before reaching Indian customs.

• Normally, in High Seas Sale, the importer (buyer) clears the goods and pays clearing charges.

• Now, you want to know if you (the seller) can reimburse clearing charges by issuing a debit note to the importer.

How to handle GST and debit note on clearing charges reimbursement:

1. Debit Note for Reimbursement:

   • Yes, you can issue a debit note to recover clearing charges from the importer.

   • This debit note should mention the same SAC code (services) relevant to clearing/handling services or the same SAC code used earlier if applicable.

2. GST Treatment:

   • The clearing charges are considered a supply of service by the clearing agent (importer has paid this).

   • When you recover these charges from the importer, you are essentially passing on the cost, so GST should be charged on this reimbursement.

   • Apply GST at the applicable rate on the clearing charges amount in the debit note.

3. Documentation:

   • Maintain proper documentation linking the clearing charges paid and the reimbursement invoice/debit note issued.

   • Make sure the debit note clearly references the original invoice related to the High Seas Sale.

4. Accounting:

   • The debit note amount (clearing charges + GST) will increase the taxable value from your side.

   • The importer can claim ITC on this GST amount if eligible.

Summary: