High Sea Sale

[SARAVANAN RENGACHARY]

Based on firm order from our India customer, we are planning to import the goods and do HSS aggreement.  However, HSS agreement will be done after despatch and before landing at customs station.

Is it correct. Please confirm.

Or is there any condition that HSS buyer PO date should be later than supplier invoice date.

[Diwakar M.S.]

The transaction of High Sea Sale will be effective as long as the goods have not entered the territoral boundary of India, technically.  It is not necessary that the goods should not have reached the Indian Customs station. I mean to say that if the goods are cleared and warehoused in a customs bonded warehouse against a Bill of Entry for Warehousing, such goods can be transacted as a High Sea sale.

However, there is a value addition clause for such HSS transaction.  To be on the safer side, it is better if the HSS buyer enter into buying arrangement with the HSS seller with a formal Purchase Order which is dated after the Supplier Invoice Date and Bill of Lading Date.

[r.rajkumar kumar]

your correct. but i feel after landing also we can enter sa;es aggree,emt/ but before payingduty

if i correct according one of the high court order from cochin. even we can sell from custums bonded were house without paying locak vat as one sea sales. tks

[Diwakar M.S.]

Please see my previous reply.  I had said that imported goods that are warehoused in Customs Bonded Warehouse(CBWH), without payment of Customs duty are still considered as being on"high Seas".  Only after payment of applicable Customs Duty, the consignment come into the purview of the relevant TNGST taxable area.  Customs Bonded goods can be sold on HSS basis.  However please note that duties are payable at rates prevailing on the date of Customs Clearance, but customs rate of exchange for conversion of foreign currency into Indian Rupees for purpose of calculating Assessable Value will be the same as prevailing on the date on which the goods were warehoused in CBWH.

Basically belowsaid things need to be ensured

1. HSS agreement need to be entered after dispatch and before receiving the goods

2. Bill of lading has to be endorsed as "Transferred on High Sea Sales basis to M/S -------- for a sales consideration of Rupees --------".

4. For customs purpose , valuation should be with some mark up.

[Diwakar M.S.]

Regarding posting by Mr Raja Rajan, Mumbai:

.................before receiving the goods.  Do you mean to say:

a) before receipt of goods by the original importer or the HSS buyer

b)before receipt of goods at a Customs station

both the above assumptions negates the possibility of HS sale as an ex-bond clearance.

HS sale from Bonded warehouse is possible.

I reply is to the query posted by ID 3526, Wherein the said query was not referring to any goods cleared from Bonded Warehouse.

[r.rajkumar kumar]

dear saravanan

High sea sale is to avoid doublelocal taxation. I can import any think as per the law of land while he good

movement i can find the market and enter in aggreement localy and the bill of entry can be changed to the buyer name before customer border. or from customs bonded weare hose. The sale should not happend with in indian territory . invoice can be raised with out local sales tax and claim high sea sale exemption u/s section 5 of CST Act. pl refer cst case law there is no of judgement on the high sea sales. In my exprience for big cases normally the A.O.will reject with some reasons. but we can get from AAC while appeal.

 

[YAGAY and SUN]

High Sea Sale agreement can also done after despatch of goods from port of loading and when the goods are stored at customs bonded warehouse.  Buyer can file the bill of entry on its name and after paying appropriate customs duty, goods can be moved out of bonded warehouse.

AI Summary

High sea sale: post-shipment transfer preserves non-domestic status until customs clearance and allows bonded-warehouse resale.
HSS transactions are valid while goods remain outside the territorial customs clearance regime; goods in a Customs Bonded Warehouse without duty payment are treated as on the high seas and may be sold on HSS terms. HSS agreements and buyer purchase orders are typically executed after shipment and dated after supplier invoice and bill of lading dates; bills of lading should be endorsed to record transfer on HSS basis. Customs duties apply at rates prevailing on clearance date, while the exchange rate for assessable value is fixed at the date of warehousing; the buyer may file the bill of entry and, after paying duty, remove goods from bond.