High-Sea Sales

High Sea Sales

What are High-Sea Sales?

High-Sea Sales is one of the best commercial transactions for the international trade of goods among the countries. It is applicable to both the transit in cargo as well as air transit. In this article, we will cover the basic details about the high sea sales and their benefits and drawbacks for the parties involved in the international trade.

Advantages and disadvantage of High Sea Sales:

High Sea Sale (HSS) means Sale Transaction happens when goods are actually in transit at High Sea i.e. during transit between the Loading and Discharge port. The date of transaction (agreement) should be between dispatch and arrival date of the vessel at the Port of delivery.

  • High Sea Sales usually executed by Traders, who buy in a large quantity of good and then sells to other buyers at Destination Country in small quantity.

Mid man traders, (who buy the good, during transit, in large quantity from the county of origin and sell in small quantity to other traders in destination county) will get the prime benefit of the High Sea Sale, as they get the Tax exemption as the transaction happened outside the Jurisdiction of any of the county.

The Advantage of High Sea Sales:

  • Goods can make available with a short period to the final buyer.
  • For the final buyer, small quantities can be bought.
  • The first buyer can get goods at reasonable/ cheaper prices in large quantities.
  • Tax benefits to the mid-man traders.

The disadvantage of High Sea Sales:

  • For High Sea sales, traders need to undergo cumbersome documentation and procedures.
  • Loading of pricing of the goods for Customs assessment.

How an Indian customer can buy goods from foreign Manufactures.

There are money methods are followed by the Indian customers to purchase goods from foreign manufactures. Indian customers can choose any of the methods convenient for them as per their business plan and sales strategy followed.

Method 1: Direct order on Indian distributor in INR:

If customers need to buy the products from foreign manufacturers in INR who have an Indian representative company or the distributor of the manufacturer can support the services by importing the products and supply the products to the customer’s door step after all the formalities such as customs clearance, GST, etc.

  • Indian Partner will get the service charge for these activities and the amount collected from customers for customs clearance and GST will be paid to appropriate agencies in the Government of India.

In case of any repair of the products which is under warranty period or customers experiences, any kind of non-compliance to the specification confirmed by the OEM ( Manufacturer ), then Indian distributor needs to take care of the to and fro of the shipment of the goods to abroad manufacturer and get it repaired and hand over back to the customer.

  • Indian distributors need to take care of the repair charges if the product is under warranty.

Method 2: Direct order on Manufacturer in Foreign Currency:

Indian customers can place direct Purchase Orders to the foreign OEM’s and if that foreign OEM has an Indian distributor and customer can ask the Indian distributor to import the product to India. In those cases, Indian distributors need to do the necessary logistic coordination and take care of logistics to import the products to India.

  • There are many Commercial terms, internationally followed for the intentional sales like Ex-Work, CIF, FOB, DDP, High-Sea Sales

Among all, Ex-Work is the best sales term for the international seller and DDP is the best term for the buyer. High-Sea Sales is one of the best commercial terms which is beneficial for both the buyer and the seller.

  • In High sea sales, the liability of the international seller is limited and the buyer will get the tax benefit.

High Sea Sales terms:

High Sea Sales are a sale carried out over the sea, by the carrier document consignee to another buyer while the goods transit is on high seas or after dispatch of goods from the port of origin and before goods arrive at the port of destination.

  • A High Sea Sales agreement signed after dispatch of goods from the port of origin & prior to their arrival at the destination port.
  • The High Sea Sales agreement should be on stamp paper.

On concluding the High Sea Sales agreement, the bill of lading (B/L) should be endorsed in favor of the new buyer of the goods.

High Sea Sales for air shipment:

In respect of air shipment, the High Sea Sales seller should write to the airline agent informing that a High Sea Sales agreement has been established with the High Sea Sales buyer and that the carrier document should therefore be considered as sanctioned in favor of High Sea Sales buyer and the carrier should be file the Import General Manifest (IGM) in the name of the buyer of High Sea Sales.

  • If the electronic data interchange (EDI) system allows the name of the High Sea buyer to be entered into the system, then there may not be any need to amend the Import General Manifest (IGM). In this case, the bill of entry/exchange (B/E) is filed in the name of the original exporter as the IGM is in this importer’s name. However, the bill of exchange (B/E) or bill of entry should show the name of the buyer of the High Sea sales in the B/E format under a separate head.
  • If the system doesn’t have the provision for showing the name of the High Sea buyer on the B/E, then the IGM should be amended and B/E filed in the name of the High Sea buyer.

High Sea Sales for the cargo in freight:

In the case of High Sea Sales, the cargo in freight value for calculation of duty is taken to be the High Sea Sales value. It should further confirm that the buyer will bear the cost of clearance of goods and all the risks involved.

  • The Agreement is normally prepared by the seller and the Buyer signs the same as a mark of acceptance. Anyone copy of the Bill of lading that is not marked as “not negotiable” can be endorsed.

The copy is first endorsed by Bank, then by the importer. Once the bill of lading is endorsed, all the import documents must be retired from Bank. Even the correspondence with Bank helps to establish the dates at times.

  • In the acknowledgment, all the documents along with the original bill of lading duly endorsed should be handed over to the buyer.
  • In fact, data is crucial. This date can be any date after the documents are retired and before the duty is assessed.
  • There is no bar on the same goods being sold more than once on high seas. In such cases, the last High Sea Sales value is taken by customs for purposes of duty levying.

The last High Sea Sales agreement should give an indication of previous title transfers. The last High Sea buyer should also obtain copies of the previous High Sea Sales agreement as such documents may be called upon by the customs.

  • High Sea Sales are also applicable to goods imported by air. In High Sea Sales, The word Sea which is appearing in it should not be constructed by its grammatical meaning.
  • As long as the sale is formalized after dispatch from seller port and before reaching the airport at the destination, such sale is considered as High Sea Sales.

If the High Sea Sales does not mind disclosing original import values to the buyer of the High Sea sales; in such cases, it is better in the point of view of custom clearance for the seller to endorse the invoice, Bill of Lading, packing list in favor of the High Sea buyer.

  • The endorsement should read “Transferred on High Sea Sales basis to M/S ________________ for a sales consideration of (currency and amount in that currency)”. Such endorsement should be signed and stamped by the High Sea Seller.

Tax Benefits of High Sea Sales:

High Sea Sales is considered as a sale process carried out outside the jurisdiction territorial of the county of the buyer. Accordingly, no sales tax is levied in respect of High Sea Sales.

The customs documents (B/E) are either filed in the name of the High Sea buyer or such Bill of Entry has an endorsement indicating the High Sea buyer’s name. The title of goods transfers to the buyer of High Sea sales, prior to entry of goods in jurisdiction territorial of the county of the buyer. The delivery from customs is therefore on account of High Sea buyer.

  • The CENVAT (Central Value Added Tax) credit in respect of CVD (Counter Veiling Duty) paid on import is entitled to the High Sea buyers. High Sea Sales goods are entitled to classification, rates of duty, and all notification benefits as would be applicable to similar import goods on normal sale.

High-sea sale transactions or imports will attract Integrated Goods and Services Tax (IGST) only once at the hands of the last importer on the final price of the item.

Levy of GST on High Sea Sales:

The GST Council has already decided that IGST on high-sea sale transactions of imported goods, whether one or multiple, shall be levied and collected only at the time of importation that is when the import declarations are filed before the Customs authorities for the customs clearance purposes for the first time.

Responsible person for the Payment of GST for High Sea Sales:

The last buyer in the chain of high sea sales would be required to furnish the entire chain of documents to the authority, such as original high-seas-sales-contract, invoice, details of charges paid, etc, to establish a link between all the contract and the transactions happened.

The final buyer is responsible for payment of GST and submission of the necessary documents required for the customs clearance of the goods in the destination county.


As High Sea sales is carried out by the actual consignee to the buyer while the material or the goods are on transit in high seas or after goods dispatch from the port of loading and before the arrival at the port of discharge, it is more convenient and equally beneficial for both the parties involved in the transaction.

HSS goods are entitled to classification, all notification benefits and rates of duty would be applicable as a normal sale during the import of goods.

If you would like to add any further information, please comment on the comment line.

Content Contributor: Anish M.

For the improvement of business, we recommend reading the following articles on this site.

Thanks & Regards.


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Harry J P is a Business development and sales professional passionate about sharing knowledge in the domain of sales, and personal finance which helps in Personal financial learning for newbie earners. This blog came out of the experiences in the domain of personal finance, business development, and the share market.

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    Thank you! !

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