High Sea Sale means a transaction which takes place at the time of import of goods while the goods are on high seas. The sale is effected by transfer of documents of title to goods before the goods cross the customs frontiers. Once the goods are sold at high sea, the Bill of Entry is filed by the person who buys goods from the original importer. For the purpose of Customs Valuation the contract price paid by the last High Sea Sale buyer was taken into consideration.

Under GST, Imports by virtue of Section 7(2) of IGST Act, 2017 are subject to IGST which says that supply of goods imported into the territory of India till they cross the Customs frontier, shall be treated as an Inter-state supply. High Sea Sales are similar to Inter-State Transactions and therefore, IGST would be levied on such supply. There were confusions with respect to the time when and how many times Tax would be levied on such transactions. The Government vide Circular No. 33/2017-Customs dt. 01.08.2017 has clarified that 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. Therefore, it is clear now that IGST would be levied only once when the goods are cleared at Customs. The last buyer would be required to produce the entire chain of documents. Like HSS agreement, Invoice, etc. to establish a connection between the first and last transaction. Therefore, the ambiguities in respect of High Sea Sale Supplies have now been removed.