Amresh K Srivastava
17 July 2012
Dear Sanjay Sahu
HSS goods are entitled to classification, rates of duty and all notification benefits as would be applicable to similar import goods on normal sale.
Further, there is practice followed in customs that in case the HSS transfer takes place at import invoice value only, the custom would add 4% of CIF value as HSS loading factor. There have been cases where HSS sellers have sold at two percent more than import CIF but custom have added 4% of CIF as HSS value addition. Such practice of customs can be challenged at the customs duty is chargeable on genuine transaction value.
The title of goods transfers to HSS buyer prior to entry of goods in territorial jurisdiction of India. The delivery from customs is therefore on account of HSS buyer. The CENVAT credit in respect of CVD paid on import is entitled to HSS buyer.
Best of Luck