High Sea Sales - Gst einvoice and Tax Rates

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ARCHANA (Querist)
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06 July 2022 Sir/Mam,

What is High Sea Sales how to prepare E invoice and Gst Tax Rate.

High Sea Sales with in india and out india Tax Rate Effects.

Please kindly explain High Sea Sales

Thanking you

Udaya Chandran

Udaya Chandran (Expert)
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07 July 2022 High sea sales is the supply of goods from one foreign country to another foreign country without such goods are entering into India. Bill of supply should be issued for high sea sales and it is exempted from GST. No e-invoice is required.

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ARCHANA

ARCHANA (Querist)
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08 July 2022 Thank you sir for your reply, from foreign country to india billing is also High Sea Sales

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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28 July 2024 In international trade, "High Sea Sales" is a specific term used to describe a transaction where goods are sold while they are still in transit to their destination country. This typically occurs when goods are purchased from a seller in one foreign country, but the buyer is another entity located in the destination country or in a different country entirely.

Here’s a detailed explanation of High Sea Sales, especially in the context of transactions from a foreign country to India:

### **High Sea Sales Explained**

#### **1. What is High Sea Sales?**

- **Definition**: High Sea Sales (HSS) involve the sale of goods that are still in transit, i.e., before they have been cleared through customs in the destination country. This means that the goods are sold from one buyer to another while they are on their way to the final destination.
- **Usage**: High Sea Sales are often used to facilitate international trade by allowing the resale of goods before they enter the importing country.

#### **2. Key Characteristics of High Sea Sales**

- **Timing**: The transaction occurs while the goods are still on high seas or in transit, i.e., before they reach the destination country’s customs border.
- **Documentation**: It typically involves multiple sets of documents including the original bill of lading and a new bill of lading or shipping documents issued to the new buyer.

#### **3. High Sea Sales in the Context of India**

- **Customs and Tax Implications**:
- **Import Duty**: Since the goods are not yet cleared by customs, import duties are not immediately applicable at the point of sale. However, the final buyer in India will be responsible for paying the applicable customs duties once the goods enter India.
- **GST/IGST**: High Sea Sales are generally not subject to GST/IGST at the time of the high sea transaction. However, GST/IGST would be applicable on the import of goods into India when the goods are cleared through customs.

- **Documentation**: For High Sea Sales, the following documents are essential:
- **Original Bill of Lading**: The document from the original seller.
- **New Sale Contract**: The agreement between the original buyer and the high sea buyer.
- **Shipping Documents**: To prove that the goods are in transit.
- **Invoice**: Issued for the high sea sale transaction.

#### **4. Accounting for High Sea Sales**

- **Sale Transaction**: Record the sale as a high sea sale in the books. This involves showing the sale from the original buyer to the high sea buyer.
- **Purchase Transaction**: For the high sea buyer, record the purchase of goods as an import transaction, including any associated costs such as freight and insurance.

#### **5. Practical Example**

Let’s say a company in the US sells goods to an Indian importer while the goods are still in transit from Singapore to India:

- **Initial Sale**: A US-based seller sells goods to an Indian company but the goods are still in transit from Singapore to India.
- **High Sea Sale**: The Indian company resells these goods to another buyer in India while the goods are still in transit.
- **Customs and Duties**: The final buyer in India will pay the applicable customs duties and GST/IGST when the goods are cleared through Indian customs.

### **Key Points to Remember**

- **Legal Framework**: Ensure that all transactions comply with the legal framework of the countries involved, including customs and tax regulations.
- **Documentation**: Maintain comprehensive documentation to support the high sea sale transaction.
- **Consultation**: It’s advisable to consult with a trade expert or legal advisor to ensure compliance with the applicable laws and to handle any complexities associated with high sea sales.

By understanding and properly documenting High Sea Sales, you can ensure that transactions are conducted smoothly and in compliance with relevant regulations.