High Sea Sales under GST

High Sea Sales under GST

  • Published on: Jan 24, 2022

Understanding the meaning of High Sea Sales under GST

High Sea Sales: Transactions taking place before filing of bill of entry are termed as “high sea sale” transactions under common trade practice where the original importer sells the goods to a third person before the goods are entered for customs clearance. This supply is covered within the definition of inter-state supply.

Whether GST is charged in High Sea Sales?

No, GST shall not be charged on High Sea Sales

What is the GST taxability mechanism of High Sea Sales?

Taxability of high sea sale under GST:- IGST on high sea sale (s) transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation i.e. when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time. Further, value addition accruing in each such high sea sale shall form part of the value on which IGST is collected at the time of clearance.

The above para is supported with entry no 8(b) of Schedule III of CGST Act, which reads as below:

Schedule III - Activities or transactions which shall be treated neither as a Supply of Goods nor a Supply of Services:




7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into India.

8. (a) Supply of warehoused goods to any person before clearance for home consumption;

(b) Supply of goods by the consignee to any other person, by endorsement of documents of title to the goods, after the goods have been dispatched from the port of origin located outside India but before clearance for home consumption.




Whether there can be multiple transactions of sale before filing import declaration?

Yes, there can be multiple transactions of sale and GST would not be chargeable on any of them.

Diagrammatical presentation for High Sea Sales is presented below:

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-         Bill of Lading will show SR-I as Buyer

-         Before reaching to custom frontier of India the goods will be sold by SR-I to SR-II

-         SR-I to enter into an agreement with SR-II known as the High Sea Sale (HSS) agreement duly notirised on a stamp paper

-         SR-I shall endorse the Bill of Lading/invoice/packing list to SR-II

-         Filing of Import General Manifest (IGM): If Shipping Line has filed the IGM in the name of SR-I then the IGM needs to be amended in the name of SR-II, this is to be done by the Shipping Line. If IGM not filed then Shipping Line to file IGM in the name of SIPL

Below is the list of Documents that would be suggested under HSS:

1.      High Sea Sales Agreement

2.      Consignee copy of Bill of Lading

3.      Certificate of Origin – meaning the Certificate which provides information of the original destination of the consignment goods

4.      Import invoice or Commercial or Sales Invoice

5.      Insurance certificate, if any

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