Query on International Transaction
This query is : Resolved
22 July 2010
Customer India----raises ---Purchase Order in US$ to ABC India-(Ship to address in Malasiya/ Singapore/ Hongkong).
ABC India---raises ---Purchase Order in US$ to Vendor India-(Ship to address on customer address in Malasiya/ Singapore/ Hongkong).
Vendor India---raises ---Sales Order in US$ to ABC India-(Ship to address on customer address in Malasiya/ Singapore/ Hongkong).
ABC India---raises ---Sales Invoice in US$ to Customer India-(Ship to address on customer address in Malasiya/ Singapore/ Hongkong).
In above transaction possible in US$ will this be termed as High Seas Sales even if it is not transacted in Indian Ocean?
Please confirm the possibility.
Thanks & Regards,
Manish
ABC India---raises ---Purchase Order in US$ to Vendor India-(Ship to address on customer address in Malasiya/ Singapore/ Hongkong).
Vendor India---raises ---Sales Order in US$ to ABC India-(Ship to address on customer address in Malasiya/ Singapore/ Hongkong).
ABC India---raises ---Sales Invoice in US$ to Customer India-(Ship to address on customer address in Malasiya/ Singapore/ Hongkong).
In above transaction possible in US$ will this be termed as High Seas Sales even if it is not transacted in Indian Ocean?
Please confirm the possibility.
Thanks & Regards,
Manish
03 August 2010
N e body Can solve above Query
10 August 2024
In the scenario described, the transactions involve multiple steps and parties across different jurisdictions, and determining whether it qualifies as a High Seas Sale requires understanding the specific definitions and rules related to such sales.
### **Definition of High Seas Sale:**
A High Seas Sale refers to the sale of goods that are in transit between two foreign ports, and it generally involves the following:
1. **Goods are in Transit**: The goods are sold while they are still on the high seas, i.e., in international waters.
2. **International Movement**: The sale occurs when the goods are transported from one foreign country to another, not entering the domestic territory of the seller or buyer.
### **Assessment of Your Scenario:**
1. **Customer (India) Raises Purchase Order to ABC India**:
- This indicates that the initial order is placed by the customer based in India to ABC India.
2. **ABC India Raises Purchase Order to Vendor India**:
- ABC India is purchasing goods from Vendor India, but the delivery address is in Malaysia/Singapore/Hong Kong.
3. **Vendor India Raises Sales Order to ABC India**:
- Vendor India sells goods to ABC India, with the delivery address again in Malaysia/Singapore/Hong Kong.
4. **ABC India Raises Sales Invoice to Customer India**:
- ABC India invoices the customer in India for goods that are shipped to Malaysia/Singapore/Hong Kong.
### **Determining if it Qualifies as High Seas Sale:**
Based on the given information, the transactions do not seem to meet the classic criteria for High Seas Sales for the following reasons:
1. **Goods are Not on High Seas**: The transaction does not involve the sale of goods while they are on the high seas (i.e., in international waters). Instead, the goods are being shipped from one port to another foreign port.
2. **Domestic Involvement**: The transaction involves entities that are based in India. Although the goods are shipped internationally, the involvement of Indian entities and the invoicing from India suggest domestic business activities.
3. **Not a Classic High Seas Sale**: For it to be classified as a High Seas Sale, the sale should typically occur while the goods are in transit on the high seas, and the buyer and seller should not be based in the same country as the goods' final destination.
### **Conclusion:**
In this scenario, the transactions are more accurately described as international trade transactions rather than High Seas Sales. High Seas Sales specifically involve goods sold while they are in international waters, and the transaction must meet certain international trade criteria that are not clearly satisfied in this case.
**Action Steps:**
- **Documentation**: Ensure all documentation reflects the international nature of the transactions and complies with export-import regulations.
- **Consultation**: For precise classification and to ensure compliance with international trade and tax regulations, consult with a trade specialist or legal advisor familiar with cross-border transactions and High Seas Sale criteria.
**Note:** The exact legal and tax implications might vary based on specific jurisdictions and regulations applicable to international trade and sales.
### **Definition of High Seas Sale:**
A High Seas Sale refers to the sale of goods that are in transit between two foreign ports, and it generally involves the following:
1. **Goods are in Transit**: The goods are sold while they are still on the high seas, i.e., in international waters.
2. **International Movement**: The sale occurs when the goods are transported from one foreign country to another, not entering the domestic territory of the seller or buyer.
### **Assessment of Your Scenario:**
1. **Customer (India) Raises Purchase Order to ABC India**:
- This indicates that the initial order is placed by the customer based in India to ABC India.
2. **ABC India Raises Purchase Order to Vendor India**:
- ABC India is purchasing goods from Vendor India, but the delivery address is in Malaysia/Singapore/Hong Kong.
3. **Vendor India Raises Sales Order to ABC India**:
- Vendor India sells goods to ABC India, with the delivery address again in Malaysia/Singapore/Hong Kong.
4. **ABC India Raises Sales Invoice to Customer India**:
- ABC India invoices the customer in India for goods that are shipped to Malaysia/Singapore/Hong Kong.
### **Determining if it Qualifies as High Seas Sale:**
Based on the given information, the transactions do not seem to meet the classic criteria for High Seas Sales for the following reasons:
1. **Goods are Not on High Seas**: The transaction does not involve the sale of goods while they are on the high seas (i.e., in international waters). Instead, the goods are being shipped from one port to another foreign port.
2. **Domestic Involvement**: The transaction involves entities that are based in India. Although the goods are shipped internationally, the involvement of Indian entities and the invoicing from India suggest domestic business activities.
3. **Not a Classic High Seas Sale**: For it to be classified as a High Seas Sale, the sale should typically occur while the goods are in transit on the high seas, and the buyer and seller should not be based in the same country as the goods' final destination.
### **Conclusion:**
In this scenario, the transactions are more accurately described as international trade transactions rather than High Seas Sales. High Seas Sales specifically involve goods sold while they are in international waters, and the transaction must meet certain international trade criteria that are not clearly satisfied in this case.
**Action Steps:**
- **Documentation**: Ensure all documentation reflects the international nature of the transactions and complies with export-import regulations.
- **Consultation**: For precise classification and to ensure compliance with international trade and tax regulations, consult with a trade specialist or legal advisor familiar with cross-border transactions and High Seas Sale criteria.
**Note:** The exact legal and tax implications might vary based on specific jurisdictions and regulations applicable to international trade and sales.
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