Everything about High Sea Sales

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

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The ownership of goods is been transferred, when items are on transit. The contract needs to be signed on a stamp paper after dispatch of goods from origin and prior to their arrival at the buyer’s destination.

The date of transaction must be between Bill of lading date and Vessel arrival date at Port of discharge.

High Sea Sale is mostly been done by traders, who buys in huge quantities and then look out for buyers at Destination.

On concluding the HSS agreement, the B/L should be endorsed in favor of the new buyer. In respect of air shipment,  seller should write to the airline / consol agent informing that a the agreement has been established with the HSS buyer and that the carrier document should therefore be considered as endorsed in favor of the HSS  buyer and further the IGM should be filed by the carrier in the name of the HSS buyer.

The endorsement should read “Transferred on High Sea Sales basis to M/S ——– for a sales consideration of Rupees ——–“. Such endorsement should be stamped as well as signed by the seller

The CIF value for calculation of duty is been taken to be the HSS 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 because of HSS buyer. The CENVAT credit in respect of CVD paid on import is entitled to HSS buyer.

Same goods can be sold more than once on high seas. There is no bar for reselling it for any number of times. Only requirement is that – the HSS agreement should give indication of previous title transfers. The customs office/officer may call upon the last HSS buyer to obtain copies of previous HSS agreement as such documents.

HSS goods are entitled to classification, rates of duty and all notification benefits as would be applicable to similar import goods on normal 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. The stamp paper on which the HSS agreement is been executed must not bear the stamp paper purchase date as being post cargo arrival date. Such a case can be easily detected by customs as being a post arrival sale.