TCS on high sea sale

[Aditya Dhanuka]

Hi,

Via Finance Act 2012, w.e.f. 01-07-2012, TCS rate of 1% has been specified on coal.

We have a case wherein an Indian resident is importing coal from abroad. The said consignment is coming via sea. During shipment, the resident importer sold the consignment via transfer of documents to another resident; i.e. high seas sales were made.

Will the said transaction be covered under TCS?

We are unable to draw any conclusion or come across any circular or case law to substantiate the same.

Can anyone provide any assistance?

[rinki]

Dear Sir,

First thing TCS is to be collected by the seller, in your case the seller being a foreigner is not bound under Indian Tax laws.

No question of TCS arises.

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[SANJEET SINGH]

Dear Mam,

In the above case, a Resident has purchased goods from abroad. The same resident sells the same on high seas basis to another Resident. The question as cited by Mr. Dhanuka was that whether the Importer i.e. the resident is to deduct TCS on the sales made by him to another Individual. ( Please Clarify Mr. Dhanuka if i am wrong ).

TCS is only not deducted when  the same are purchased by the buyer for personal consumption. Further, the seller of these minerals shall not collect tax if the buyer declares that these minerals are to be utilized for the purposes of manufacturing, processing or producing articles or things. If the Person to whom the High Seas sales were made fall in any of the above two categories, TCS shall not be deducted, otherwise no such exemption.

Thanks & Best Regards,

Sanjeet Singh

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Sanjeet Singh

Mob:+91 9038940369

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[Subhash Tiwary]

Dear Sir / Madam ,

 

Yes .. I think below understanding is correct  and we are also following up  the same process in this type of transaction. If some one has different opinion , pls revert with the provision backed by  provision of laws.

 

Thanks & Regards

 

S. Tiwary

[vkg...@gmail.com]

 Mr Sanjeet Singh

please clarify  following Point is TCS is applicable:-

(1) If that IInd resident  purchaser  sold this matter to  other  trader under E1-C Invoice where   Buyer is Trader {(Say ABC  Pvt Ltd , Nagpur Maharastra) ]& Consignee is Actual User(manufacturer) [Raipur Steel Re Rolling Mill , Raipur(Chhattisgarh) ] & goods is directly despatched from Port Yard of IInd Resident Purchaser from Vishakhapatnam  to Raipur   & LR is endorsed by ABC Pvt Ltd  Nagpur in favour of Raipur Steel Rerolling mill).

(2)If that IInd resident  purchaser  sold this matter to  other  trader under E1-C Invoice where   Buyer is Trader {(Say ABC  Pvt Ltd , Nagpur Maharastra) ]& Consignee is Actual User(manufacturer) [Raipur Steel Re Rolling Mill , Raipur(Chhattisgarh) ] & goods is directly despatched from Port Yard of IInd Resident Purchaser from Vishakhapatnam  to Raipur   & LR is endorsed by ABC Pvt Ltd  Nagpur in favour of new trader (say Ramesh traders Raipur) & than new trader has endorsed  the same  to  Raipur Steel Rerolling mill Raipur).who is manufacturer by E2-C sales. whether ABC Pvt Ltd have to charge TCS from Ramesh Traders Raipur)

In above all cases all the parties have PAN No. Tin No , CST No.  TCS No. TAN etc.

On Thursday, August 8, 2013 12:00:36 AM UTC+5:30, SANJEET SINGH wrote:

Dear Mam,

In the above case, a Resident has purchased goods from abroad. The same resident sells the same on high seas basis to another Resident. The question as cited by Mr. Dhanuka was that whether the Importer i.e. the resident is to deduct TCS on the sales made by him to another Individual. ( Please Clarify Mr. Dhanuka if i am wrong ).

TCS is only not deducted when  the same are purchased by the buyer for personal consumption. Further, the seller of these minerals shall not collect tax if the buyer declares that these minerals are to be utilized for the purposes of manufacturing, processing or producing articles or things. If the Person to whom the High Seas sales were made fall in any of the above two categories, TCS shall not be deducted, otherwise no such exemption.

Thanks & Best Regards,

Sanjeet Singh

On Tue, Aug 6, 2013 at 3:53 PM, rinki <lovr...@gmail.com> wrote:

Dear Sir,

First thing TCS is to be collected by the seller, in your case the seller being a foreigner is not bound under Indian Tax laws.

No question of TCS arises.

On Sat, Aug 3, 2013 at 7:33 PM, Aditya Dhanuka <adityar...@gmail.com> wrote:

Hi,

Via Finance Act 2012, w.e.f. 01-07-2012, TCS rate of 1% has been specified on coal.

We have a case wherein an Indian resident is importing coal from abroad. The said consignment is coming via sea. During shipment, the resident importer sold the consignment via transfer of documents to another resident; i.e. high seas sales were made.

Will the said transaction be covered under TCS?

We are unable to draw any conclusion or come across any circular or case law to substantiate the same.

Can anyone provide any assistance?

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[anes.m...@gmail.com]

Dear Sirs, 

Now that It is clear that TCS is applicable on High Sea Sales, one more question arises. When we make high sea sales we raise sale invoice when the goods (coal in this case) is still on high seas (ie. in transit). So while raising invoice, we take exchange rate as on B/L date, add our trading margin and arrive at a value and collect 1% TCS on that value. However we make the supplier payment much after goods arrived, ie against L/c and exchange loss/gain if any is transferred the seller again through debit/credit notes. 

Question is, In case there is exchange loss, ie, we paid supplier more and transfer the exchange fluctuation along with our margin to the seller through debit note, whether TCS is applicable on the additional sale value too? Please clarify. If applicable is it due in the month of payment to supplier or in case we transfer the exchange loss to our seller in next month, is it due in that month? 

[VKS]

Dear Mr.S Singh,

Understand that TCS in not deducted when the same are purchased by the buyer:

1. For personal consumption. 

2. The buyer declares that these minerals are to be utilized for the purposes of manufacturing, processing or producing articles or things.

What if the buyer is purchasing the minerals for resale? Can he issue Form 27C? 

Reason I am asking this is that in Form 27C it is only mentioned as purposes of manufacturing, processing or producing articles or things.

I have purchased minerals on High Sea Sale and reason for purchase by me is for resale. Can I issue Form 27C to my supplier or shall I ask them to collect TCS?

Kindly advice.

Thanks,

VKS

On Thursday, 8 August 2013 00:00:36 UTC+5:30, SANJEET SINGH wrote:

Dear Mam,

In the above case, a Resident has purchased goods from abroad. The same resident sells the same on high seas basis to another Resident. The question as cited by Mr. Dhanuka was that whether the Importer i.e. the resident is to deduct TCS on the sales made by him to another Individual. ( Please Clarify Mr. Dhanuka if i am wrong ).

TCS is only not deducted when  the same are purchased by the buyer for personal consumption. Further, the seller of these minerals shall not collect tax if the buyer declares that these minerals are to be utilized for the purposes of manufacturing, processing or producing articles or things. If the Person to whom the High Seas sales were made fall in any of the above two categories, TCS shall not be deducted, otherwise no such exemption.

Thanks & Best Regards,

Sanjeet Singh

On Tue, Aug 6, 2013 at 3:53 PM, rinki <lovr...@gmail.com> wrote:

Dear Sir,

First thing TCS is to be collected by the seller, in your case the seller being a foreigner is not bound under Indian Tax laws.

No question of TCS arises.

On Sat, Aug 3, 2013 at 7:33 PM, Aditya Dhanuka <adityar...@gmail.com> wrote:

Hi,

Via Finance Act 2012, w.e.f. 01-07-2012, TCS rate of 1% has been specified on coal.

We have a case wherein an Indian resident is importing coal from abroad. The said consignment is coming via sea. During shipment, the resident importer sold the consignment via transfer of documents to another resident; i.e. high seas sales were made.

Will the said transaction be covered under TCS?

We are unable to draw any conclusion or come across any circular or case law to substantiate the same.

Can anyone provide any assistance?

--
forum4ca is a Google Group of eServe online for the benefit of CA and other professionals. It is especially meant for written discussion & circulate information within group members. The mail may contain such research/advice/opinion/information/fact provided by any member and are subject to the accuracy and of the description of facts.The forum4ca, do not claim that contains in mail/information obtained after reading as a complete and accurate disclosure of relevant facts. Further this Group’s Owner/Moderator/Member are not liable for any damages or costs suffered due to action/transaction based on information on this Group.
 
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