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.
HSS is accepted under the import trade control
regulation. Refer para - of export import policy.
HSS contract/ agreement should be signed after dispatch of
goods from origin & prior to their arrival at destination.
The agreement should be on stamp paper.
On concluding the HSS agreement, the B/L
should be endorsed in favour of the new buyer. In respect of
air shipment, HSS seller should write to the airline /
consol agent informing that a HSS agreement has been
established with the HSS buyer and that the carrier
document should therefore be considered as endorsed in favour
of the HSS buyer and further the IGM should
be filed by the carrier in the name of the HSS buyer.
If the EDI system allows name of HSS buyer
to be entered in the system, then there may not be any need to
amend the IGM. In this case the B/E is filed in
the name of the original importer as the IGM is in this
importer name. However , the B/E shows the name of HSS
buyer under a separate head in the B/E format. If the
system has no provision for showing the name of HSS
buyer on the B/E ,then the IGM should be got
amended and B/E filed in the name of the HSS
In the case of HSS , the CIF value for
calculation of duty is taken to be the HSS value.
There is practice followed in customs that in case the
HSS transfer takes place at import invoice value only ,
the custom would add 4% of CIF value as HSS
loading factor . There have been cases where HSS
sellers have sold at two percent more than import CIF
but custom have added 4% of CIF as HSS value
addition. Such practice of customs can be challenged at the
customs duty is chargeable on genuine transaction value.
In HSS contracts the HSS seller may not like
to disclose the import value to the HSS buyer. However,
the customs can call for the original import invoice, in which
case the HSS seller may have to part with this
information. To overcome this, HSS seller should take
on the responsibility of custom clearance and site delivery.
After custom clearance, the HSS seller could withdraw
import invoices and only hand over clearance documents with HSS
agreement to the HSS buyer. The custom bill of entry
does not indicate original import value and is prepared on HSS
There is no bar on same goods being sold more than once on
high seas. In such cases, the last HSS value is taken
by customs for purposes of duty levying. The last HSS
agreement should give indication of previous title transfers.
The last HSS buyer should also obtain copies of
previous HSS agreement as such documents may be called
upon by the customs.
HSS is considered as a sale carried out outside the
territorial jurisdiction of India. Accordingly, no sales tax
is levied in respect of HSS. The customs documents (B/E)
is either filed in the name of HSS buyer or such B/E
has an endorsement indicating HSS buyer's name.
The title of goods transfers to HSS buyer prior to
entry of goods in territorial jurisdiction of India. The
delivery from customs is therefore on account of HSS
buyer. The CENVAT credit in respect of CVD paid
on import is entitled to HSS buyer.
HSS goods are entitled to classification, rates of duty
and all notification benefits as would be applicable to
similar import goods on normal sale.
HSS is also applicable to goods imported by air. Sea
appearing in HSS should not be constructed by its
grammatical meaning. As long as the sale is formalized after
dispatch from airport / port of origin and before arrival at
the first port of discharge / airport at destination, such
sale is considered as HSS.
Sometime HSS buyers buy goods after their arrival.
Such sale are not HSS. The stamp paper on which the HSS
agreement is executed must not bear the stamp paper
purchase date as being post cargo arrival date. Such a case
can easily be detected by customs as being a post arrival
If the HSS does not mind disclosing original import
values to HSS buyer, in such case it is better from
custom clearance point of view for the seller to endorse the B/L,
invoice , packing list in favour of the HSS buyer. The
endorsement should read "Transferred on High Sea Sales
basis to M/S -------- for a sales consideration of Rupees
--------". Such endorsement should be stamped and signed
by the HSS seller.