The sale of any goods imported from one country and sold to another individual while the consignment is on the high seas (in transit) or before they have crossed the border of the country is called a High Sea Sale. It is very common practice in export import industry. Import and export courses online are known for best export import training. Learn import export online and know A to Z of International trade. Normally, high sea sales agreements or contracts are signed after the goods have left their origin and before they arrive at their final destination. It is necessary to endorse the bill of lading in the buyer’s favor. The transaction date must fall between the date of the Bill of Lading and the date of arrival of the vessel at the port of discharge. It is essential that the final buyer has all documents related to the high sea transaction. The last buyer of high seas should obtain copies of previous high seas sales as well. Trading companies usually get involved in high seas sales, purchase in bulk and then look for buyers at the destination. A high seas sale also applies to goods imported by air.
Advantages of High Sea Sales-
- Original importer will be able to buy goods at cheaper cost and will be able to sell at profit.
- Original/final buyer will be able to buy goods quickly, which will be more productive than importing from origin country.
- Final buyer is not required to buy the entire shipment, he can buy part shipment based on his requirements.
- Sales made through high sea sales are considered to be outside the territorial jurisdiction of India and so no sales tax is levied.
- By presenting the bill of entry at customs for home consumption, the end high seas sales buyer can receive tax exemptions or concessions.
Documents required to completing High Sea Sales:
1 High Sea Sale Agreement-
Written agreements between a buyer and a recipient of high sea sales are known as high seas sales contracts.
2 Sale Invoice/ Commercial Invoice-
In this case, high seas sales must be made in the local currency of the importing country, and not in foreign currencies. It mentions the quantity of the item imported alongside their rates.
3 Consignee copy of Bill of lading-
It has to be enclosed along with other importing documents under high sea sale. Bills of Lading serve as important documents showing ownership.
4 Import Invoice-
The document reflects the original contract, which was made between the consignee and seller at the beginning. The invoice in this case differs from the high seas invoice since the intermediary on high seas may change the price of the goods.
5 Certificate of Origin-
It provides information on the origin destination of the goods. Under high sea sales, it is necessary for import customs clearance procedures and formalities. A Certificate of Origin must be included on the original buyer’s commercial invoice for a high sea sale.
6 Insurance Certificate-
Insurance policies for goods for import may also be assigned to a new buyer over high sales by the original buyer of the policy.
Conclusion-
Since the sale is carried out outside the jurisdiction of India, there is no sales tax on high seas sales. During high seas, it is not forbidden to sell the same goods to more than one buyer at the same time. It is advantageous to opt for high sea sales because the end buyer is known as the importer and can benefit from any exemptions that may apply as the products/items pass through customs. To know more about import export business, visit our website and read export import blog. You can gain practical knowledge about export import that too totally free in our webinar. To join click the link below. https://chat.whatsapp.com/Bqz4SWH55nSGtKj3GnJAC8 Do give us a visit!
