High Sea sales (HSS) is accepted under the import trade control regulation. It is a sale carried out by carrier document consignee to another buyer. During this the goods are yet on high seas or after their dispatch from port of loading (POL) and before their arrival at the port of discharge (POD). Sales in International Business is highly impactful.
India is the 16th largest maritime country in the world along with a coastline of about 7,517 km.
It mostly happens by the traders who buys huge quantities and then look out for buyers at the destination.
High Sea Sales Procedure
- HSS contract/ agreement
- Date of transaction
- Endorsement
- Import General Manifest
- No bar for reselling goods
- Entitlement of HSS Goods
- Buying goods after their arrival
HSS contract/ agreement
- It has to be signed after the dispatch of goods from origin and prior to its arrival. This should be on a stamp paper.
Date of transaction
- The date of transaction is between Bill of lading (B/L) date and Vessel arrival date at the Port of discharge.
Endorsement
- When HSS agreement is in conclusion, the B/L should be endorsed in favor of the new buyer. In case of air shipment, the seller should write to the airline / consol agent informing the same.
Import General Manifest
- Furthermore, it is important that the carrier in the name of the buyer should file the Import General Manifest.
- The CENVAT credit in regard of CVD paid on import is given to the buyer.
No bar for reselling goods
- There is no limit for reselling it for any number of times.
- But only important thing is- the previous title transfers must be there in the agreement.
HSS goods
- It is entitled to classification, rates of duty and all notification benefits and applicable to similar import goods on normal sale.
Buying goods after their arrival
- If goods are bought after their arrival then such a sale is not a High Sea Sale.
- The stamp paper must should not include purchase date. Customs being a post arrival sale can easily detect such sale.
You can also learn about the export-import documentation for your better understanding.
THE ABOVE IMAGE SHOWS SHIPPING INDUSTRY & PORTS IN INDIA
High Sea Sales Important Points
- Port Indian Port sector has received a cumulative Foreign Direct Investment of US$ 1.64 billion between April 2000 & June 2019.India has 12 major as well as 200 notified minor and intermediate ports.In fact, by the year 2019, the capacity at major Indian ports had reached 1,477 million tonnes.Not only these ports handle 95% of trade volumes but also rising trade contributes significantly to the country’s cargo traffic. Ready For Sales in International Business?
Shipping Industry
It plays a major role to sustain growth in the country’s trade and commerce.
As per the Ministry of Shipping, nearly 95% by volume of India’s trading and 70% by value is moved through the maritime transport.
In addition to this, as per Union Budget 2019-2020, total allocation for the Ministry of Shipping is $ 272.2 million.
In the year 2019, cargo traffic at non-major ports was estimated at 28 million tonnes.
It’s expected in 2020 year, proposed investments may reach US$ 18.6 billion in major-ports & US$ 28.5 billion in non-major ports.
GST on High Sea Sales
GST Council decided GST on high sea sales is similar to the rules provided under the Customs Tariff Act, 1975.
Under the Customs Tariff Act, in respect of imported goods, all duties, taxes, etc. would be collected at the time of importation.
It means when import declarations are filed before the customs authorities for the custom clearance purposes.
Constitutional Validity:
According to Article 286 (1) (b) of the constitutional Law which states that no Law of state shall impose or authorize the imposition of, a tax on sales or purchase of goods where such sale or purchase takes place in the course of import of goods into, or export of the goods out of, the territory of India.
Conclusion:
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