How are high sea sales done?

High sea sales is a sale carried out by the actual consignee (i.e. the consignee shown in the Bill of Lading) to another buyer while the goods are on high seas or after their dispatch from the port of loading and before their arrival at the port of discharge.

Is high seas sale an export sale?

HSS is been considered as a sale carried out outside the territorial jurisdiction of India and so no sales tax is levied in respect of HSS. Sometime HSS buyers buy goods after their arrival. Such sale is not HSS.

What is high sea sales in customs?

High Sea Sales is a common sales practice carried out by the actual buyer and another buyer while the goods are on high seas or before the goods have crossed the customs frontiers of the specific country.

What is the advantage of high sea sales?

The Advantage of High Sea Sales: Goods can make available with a short period to the final buyer. For the final buyer, small quantities can be bought. The first buyer can get goods at reasonable/ cheaper prices in large quantities. Tax benefits to the mid-man traders.

How do custom value goods under high sea sales?

Thus in case of high seas sale, the actual high sea sale contract price paid by the last buyer would constitute the transaction value. It is, however, seen that in many Customs Houses including Mumbai, the practice of loading the original import price by 2\% to arrive at assessable value is still continuing.

What is high sea sales in SAP?

High sea sales is effected by exchange of documents at a point beyond the territorial waters to avoid custom duties. Means high sea sales is a sale made while its in sea only.

Is high sea sales exempted or nil rated?

A question arises whether high seas sales would be considered ‘non-taxable supply’. Consequently, such transactions would also fall outside of the ambit of ‘exempt supply. ‘ Thus, since it is not covered under ‘exempt supply’, there would be no ITC reversal requirement as per Section 17 of the CGST Act.

What is the difference between high sea sales and merchanting trade?

Also as per, RBI Guidelines “For a trade to be classified as merchanting trade, goods acquired shall not enter the Domestic Tariff Area.” This is the stark difference between High Sea Sales and Merchant trade transaction. While the former must be followed by ultimate import, the later must not include import.

What is meant by high sea?

high seas, in maritime law, all parts of the mass of saltwater surrounding the globe that are not part of the territorial sea or internal waters of a state.

How do you check high sea sales?

Important document to be verified:

1. High sea sale agreement between the party.
2. Declaration by the buyer to bear the responsibility of custom on its letter head.
3. Invoice of vendor and Invoice to customer is in line after adding appropriate margin.

Who is importer in case of high sea sale?

In the case of high sea sale transactions, the original importer sells the goods to his customer, while the goods are still on high seas. Thus, unlike regular import of goods, the original importer himself doesn’t bring the goods into the territory of the country.

What are the documents required for high sea sales?

Documents required for a high sea sales transaction

• Commercial invoice or Sales Invoice.
• High Sea Sales Agreement.
• Consignee copy of Bill of Lading.
• Certificate of Origin.
• Import invoice.
• Insurance certificate.
• Whether each successive transfer of goods over high seas attracts GST.
• Scenario when IGST will have to be paid.

What is meant by sale of goods on high seas?

As per trade practice, sale of goods when they are on high seas, that is, in transit, is recognized and in such transactions, the liability to comply with import regulations and to pay Customs duty shift to the buyer of the goods.

Can a high sea seller disclose the import value of goods?

In High Sea Sales contracts, the High Sea seller may not like to disclose the import value to the High Sea buyer. However, the customs can call for the original import invoice, in which case the High Sea seller may have to part with this information.

What is the import duty on high seas?

If the purchase is on High Seas, the selling price will be naturally higher than the price at which the original buyer imported the goods. However, even if price is lower, the duty will be payable on price at which goods are sold on high sea basis to final importer.

What is the delivery from customs on account of high sea buyer?

The delivery from customs is therefore on account of High Sea buyer. The CENVAT credit in respect of CVD paid on import is entitled to High Sea buyer. High Sea Sales goods are entitled to classification, rates of duty and all notification benefits as would be applicable to similar import goods on normal sale.