What is a High Seas Sale..??

Here is an interesting topic from Asha’s Maritime News..

High Sea sales (HSS) is a sale carried out by the actual consignee (ie, the consignee shown in the Bill of Lading) to another buyer while the goods are yet on high seas or after their dispatch from the port of loading (POL) and before their arrival at the port of discharge (POD). 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. The word ‘Sea’ appearing in HSS should not be taken by it’s literal meaning. As long as the sale is formalized after dispatch from port of origin and before arrival at the first port of discharge at destination, such sale is considered as HSS.
On concluding the HSS agreement, the B/L should be endorsed in favour of the new buyer. If the seller 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.
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 sale. 

The IGM should be filed by the carrier in the name of the HSS buyer. If not Import General Manifest (IGM) should get amended for which Customs will impose a penalty.

Same goods can be sold more than once on high seas. In such cases, 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 title of goods transfers to HSS buyer prior to entry of goods in territorial jurisdiction of India.

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40 thoughts on “What is a High Seas Sale..??”

  1. Is it allowed to close a deal by concluding price and finance terms before shipment and make it high sea sales after shipment. Means, the buyer arranges delivery order to local dealer in January, shipment happens in February and the goods are sold to the buyer in February. Is this allowed under HSS

    Reply
  2. Hello, Sir! In the case where the shipping company bill is issued in the name of the original importer but the BoE and HSS agreement is in the name of the HSS buyer, will the HSS be valid? Kindly answer

    Reply
    • If the bill is issued in the name of someone, it is a STRAIGHT BILL OF LADING which is non-negotiable and non-transferable, so it cannot be endorsed to the HSS buyer.. If there is such plans then it is better to issue as a TO ORDER Negotiable bill so that it can be transferred..

    • Yes. Bill of Lading should be endorsed in favour of H.S.Buyer well before receipt of the goods at destination to fall in HSS.

  3. Dear Sir.,,
    If the buyer changed after HSS & IGM filed on on first buyer but container not discharged at POD. Is there any chance to transfer the same HSS to another buyer? Like transferred High Sea Sale agreement?

    Reply
    • Yes. But the same to be done well before the goods arrival at port of destination. Port of destination includes both sea port and airport.

    • Simple answer is ‘NO’ HSS Agreement must be done prior to flight landing at destination. Otherwise it will not be HSS at all. Original sellers Invoice, Bill of Lading, Packing List etc should be ‘ENDORSED’ in favour of HSS Buyer and IGM should be filed by the carrier in the name of HSS Buyer well before arrival of the goods at destination port or Airport to make it a HSS.

  4. dear sir

    i am parveen yadav from haryana , i am working in company my issue is that our company do high sea sale . can we raise invoice in sale invoice series or raise other series

    Reply
  5. In respect of High Seas Sale, can there be different countries involved? e.g. Original shipment from India to Singapore, can this be diverted high seas to Myanmar? Would the shippling line object to the COD(change of destination) request, if we disclose such high seas sale prior to the original shipment?

    Reply
  6. I am trying to know about HSS risk, insurance, ownership are transferred from seller to final buyer? Who should carries the costs of overheads till completion of dealing of HSS.

    Reply
  7. by reading of the nature of high sea sales, I presume it can be done only if it is an FOB IMPORT. SINCE IN CASE OF CIF IMPORTS PROPERTY IN GOODS PASS TO BUYER ONOY AT PORT OF LANDING, HENC HE HAS NO OWNERSHIP OF THE SHIPMENT FOR SELLING IT HIGH SEAS. PLS. CONFIRM this view!

    Reply
  8. Can we give and commercial invoice before the ship sails.
    Can I do HSS on same day the ship sails.
    Can HSS be disallowed if date of issuence of B/L is later than date of shipping.

    Reply
  9. here i would like to clear that high seas sales are considered only if goods have not crossed the custom barrier of the country and before the custom clearance of the goods are transferred to buyer and buyer will clear the shipment from the custom no matter goods has come through air of seas, for that both party will sign a agreement of high sea sale and on the basis of that buyer can clear the shipment from customs of the country. format of the agreement of high sea sale can be obtained from internet and need to be filled in the a stamp paper and stamp paper.

    Reply
  10. Good Day All,

    I am trying to understand everything on a HSS. I am however not sure when risk, insurance, ownership are transferred between initial seller and buyer, and next final buyer? Who carries which costs till which point?

    Any help will be much appreciated.
    Kind regards,
    Tenille

    Reply
    • Hi Abhishek, i have limited knowledge of Air cargo.. But irrespective of the mode of carriage, i suppose this should be a possibility.. Maybe one of the other readers with a bit more experience with air cargo can assist..

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