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High Seas Sale Transaction

Amit Bhatkar (Service) (457 Points)

14 January 2009

Hi All Is it necessary to compulsoriliy apply for Advance License scheme under Custom before entering into High Sea Sale Transaction ? In simple words Can the Assesse enter into HSS agreement without taking Advance License ? In HSS, whether custom duty as well as CVD / SAD calculated on NIL percentage ? Thnx and Best Regards Amit

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9 Replies

Rajeev Nair (Finance Professional) (510 Points)
Replied 14 January 2009

Dear Amit,

I can advice on the other part...with practical experience.

That the High-seas purchase does not require any Advance License from Customs. In fact a simples Bond [if not wrong 59A ] is issued by the importer and it indicateds the general term's like acceptance by both buyer and seller along with details of relavance complaiances.

On CVD & CUSTOMS my answer is NO.. there is no such provision i have ever came to know on Nil % - Customs & Excise duties will be charged accordingly on the COMMODITY...

Rajeev

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Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 14 January 2009

Well, High Sea Sale means, a transaction of sale on the high seas. High seas are not in jurisdiction of any country, and hence on high sea sales, there is no duty liability of any kind. High sea sale can be transacted in various mode. No written contract is necessary. In fact, a bill of lading- which is a negotiable instrument, may be endorsed in favour of the buyer- that is sufficient high sea sale transaction. There is no requirement that Advance License must be there before entering high sea sale transaction. Advance license may be procured and utilised even after the goods has been arrived in india. In fact, if license is not there even at that time, the goods may be warehoused, and later after receipt of licence, goods can be cleared without payment of duty. No duty is payable on advance licence (now a days called advance authorisation).

vamsi (Student) (36 Points)
Replied 29 December 2009

high sea sales made to indian companies and received in Indian Rupees... can it be considered as Export sales

vamsi (Student) (36 Points)
Replied 29 December 2009

its urgent if any one can help

prakash (Managing Director) (22 Points)
Replied 01 January 2010

Dear Amit,

First let me explain u the terminology of High seas sale, " the sale of the shipment is done at the time when the cargo is on high seas, that means high sea sale, it is actually selling of documents and not of cargo,"

It is mandatory that there has to be an aggreement for High seas sale , and the most important is the date, the date of the aggreement has to be after the cargo has sailed from port of loading ie (the bill of lading date) , and prior to shipment reaches the destination ie India, it hasto be done on stamp paper.

there is no relation of advance license procurement and high sea sale, regarding the duties , it remains the same and there is no change , but duty in case of high seas sale is charged also on addition value of aggreement or 2% whichwer is more. the bill of entry is filied in the name of the ultimate buyer.

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Dharmendra Sharma (Business Head) (21 Points)
Replied 26 May 2012

Sir I am working in a co dealing in sapre parts of air craft i want to know that if we purchage 50 items in one shipment and buyer give HSSA and we cleared goods from customs on high sea sale agreement. after receiving goods party denied to take meterial , my quistion is whether i can sell those goods to another party without paying customs duety.

Sreenivas (CEO) (30 Points)
Replied 30 May 2012

Dear Dharmendra Sharma, Please note customs will impose the duty on the basis of the commodity/product only, If you import any material HSSA also duty must be paid if applicable., once you cleared cargo from the customs( after paying the duty), you can sell it any party, but customs duty must be paid at the time of clearance.