CST ACT 1956 - High Sea Sales definition under Central Sales Tax Act 1956

HIGH SEA SALES

          There are three types of purchases:

1)    Local Purchase or Intra-State Purchase i.e. Purchases of goods within the State.

2)    Other State Purchase or Inter-State Purchase i.e. Purchases of goods from the dealers outside the State.

3)    Imports i.e. Purchases of Goods from other Countries.

     There are three types of sales:

1)    Local Sales or Intra-State Sales i.e. Sales of Goods within the State.

2)    Other State Sales or Inter-State Sales i.e. Sales of goods to the dealers outside the State.

3)    Exports i.e. Sales of Goods to other Countries.

          A dealer (buyer) places orders to a dealer outside the country and the consignment comes from other country to India.  A dealer who placed the order to purchase goods from other countries takes delivery of goods from Customs. The transaction is called Import from other countries by the dealer or buyer or importer.

          But before arrival of goods, the dealer who placed the purchase order to a dealer outside the country wants to sell the same to another person or dealer. 

          If a buyer wants to sell his consignment to a third party before arrival of goods but after sailing vessel from load port, such sale is known as High Sea Sale.

          The procedures to be followed are as follows:

1.      High Sea Sales is a sale carried by the actual consignee (i.e.) dealer who placed the order to another dealer in another country and sale Bill and Bill of Lading raised. (Shown in the Bill of Lading).

2.      The goods are despatched by the seller from other country and shipped from the Port of Lading and the goods are moving to the country of the consignee (India) and not reached the country and the goods are on the sea.

3.      Before arrival of the goods at the Port of discharge, the buyer or consignee wants to sell the same to another dealer within the country.

4.      For that purpose the dealer who placed the order for goods from other country enters into an agreement in stamp paper with another dealer after despatch of goods from other country and before arrival of goods to the port of discharge. Such agreement is called High Seas Sales Agreement.

5.      After signing the agreement the dealer endorses the title of goods in favour of new buyer in India in the Bill of Lading along with the Certificate of Origin endorsed in favour of buyer for customs clearance.

6.      The High Seas Seller should also endorse the Packing list of goods issued by the first seller in other country with the Bill of Lading endorsed in favour of new buyer.

7.      The Insurance Certificate is also to be duly endorsed in favour of buyer by the High Seas Sales dealer.

8.      The sale invoice issued by the first seller will be in the currency of the country from which the goods are exported and the same should be converted into the local currency of the importing country and the High Seas Sales Bill endorsement must be in local currency of the importing country (Rupee).

9.      Same goods can be sold more than once on High Seas.  In such cases, High Seas Sales agreement should give indication of previous title transfers.  The last High Sea Sales buyer should also obtain copies of previous High Sea Sales agreement as such documents may be called upon by the Customs.

10. High Sea Sales is considered as a sale carried out outside the territorial jurisdiction of India.

11. No sales tax is levied in respect of High Sea Sales as the goods were transferred by title transfer prior to entry of goods in territorial jurisdiction of India.