JAYESH SANGHRAJKA & CO.

Chartered Accountants

From the Research Desk______________________________________

Brief Overview - High Sea Sales

Meaning of high Sea Sales
High Sea sales (HSS) is a sale carried out by the carrier document consignee to another
buyer while the goods are yet on high seas or after their dispatch from the port/ airport of
origin and before their arrival at the port / airport of destination.
In Simpler Words, It means sale of goods after crossing the Custom barriers of the Foreign
Nation but before crossing (entering) the Custom frontiers of India by way of transfer of
documents of title of goods, that is, While it is in transit.
High Sea Sale Agreement:
This is an agreement where the HSS seller do the import by means of sea and sell the same
to the HSS buyer before the consignment reaches port of destination.
For Example,A from America sells goods to B of India at some price .Now B, in this case is
called the Importer B , further sells the goods to C of India by entering into a HSS
agreement-transaction between B & C is called High Sea Sales where B is called HSS seller
& C as HSS Buyer.
Benefit / Objective of High Sea Sales:
No Central Sales Tax/ Local Sales Tax is chargeable which would have to be paid on the resale if the importer was involved as a middle man.Moreover, a high sea sale is considered
as a sale carried outside the territorial jurisdiction of India.
Procedure of High Sea Sales
Step 1: After Completion of Export Procedures, the Exporter submits all necessary
documents to his bank.
Step 2: HSS Seller Enters into an Agreement of Sale (High Sea Sale Agreement) with HSS
Buyer after the movement of goods from the territorial border of exporter but before arrival
of goods at the territorial border of India.
Step 3: HSS Seller accepts documents from his bank which has been sent by Exporter
through his bank. If the payment terms with Exporter and HSS Seller are on Letter of Credit
or Payment against receipt of Documents, HSS Seller remits invoice value of goods to
Exporter before collecting documents from bank. In case of credit arrangements with
1
his letter is for private circulation only. The letter is brought by a group of professionals Batgach. These
professionals represent several well established Chartered Accountancy Firms. The letter is being brought
onlywiththeintentiontogiveinformation&nottosolicitclientsorbusinessagainsttheguidelinesissuedby
TheInstituteofCharteredAccountantsofIndia.

JAYESH SANGHRAJKA & CO.

Chartered Accountants

From the Research Desk______________________________________

Exporter, HSS Seller remits invoice value of goods to Exporter as per the arranged credit
period. The Bill of Lading (or airway bill) is endorsed by HSS Seller and transfers the title of
goods in favor of HSS Buyer.
Step 4:HSS Seller prepares invoice to HSS Buyer in local currency (INR). HSS Seller
delivers endorsed original Bill of lading (or airway bill), his invoice in local currency along
with import invoice, packing list, certificate of origin, insurance certificate and other
necessary documents if any for import clearance duly endorsed. Exporter retains a copy of
all documents which HSS Seller delivers to HSS Buyer.
Step 5: HSS Buyer files Bill of entry along with other import documents delivered by
Exporter with customs authorities. HSS Buyer pays necessary import customs clearance
charges with import duty if any. HSS Seller can also under take customs clearance and
delivery to HSS Buyer, if HSS Seller does not want the HSS buyer to know the actual
contract price of Exporter and HSS Seller. In this case, HSS Seller is filing documents on
behalf of HSS Buyer to hide the selling price between Exporter and HSS Seller.
Step 6: Once after completion of import customs clearance procedures, HSS Buyer delivers
a copy of bill of entry to HSS Seller. HSS Seller files the said bill of entry and other copies of
import documents and high sea sale documents with his bank.
Documents Required to Prove High Sea Sales:
The following is the checklist of documents that would be required to prove a High Sea Sale
Transaction:

High Sea Sales Agreement Copy on Non-Judicial Stamp Paper of requisite value as
per State Stamp Duty Act.
Copy of Import Bill, Bill of Lading & Airways Bill, Insurance Papers.
Debit Note issued by importer/seller for his profit margin.
Bill of entry specifying the name of Final Importer and proof of payment of Custom
Duty.

2
his letter is for private circulation only. The letter is brought by a group of professionals Batgach. These
professionals represent several well established Chartered Accountancy Firms. The letter is being brought
onlywiththeintentiontogiveinformation&nottosolicitclientsorbusinessagainsttheguidelinesissuedby
TheInstituteofCharteredAccountantsofIndia.