14 November 2009
It means sale of goods after crossing the Custom barriers of the Foreign Nation but before crossing the Custom frontiers of India by way of transfer of documents of title of goods. Relevant Law for High Sea Sales Sec 5(2) of CST Act,1956• A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India
14 November 2009
I would like to add to the reply of Shri Chandra Kishor Bajpai, that in practical High Seas transaction took place in order to avoid the Sales Tax consequence.
Technically, the High Seas means the area of Sea beyond Indian Frontier in other words since the event of delivery of goods by way of exchange of the title documents took beyond the Indian regime, it will not attract Indian Sales Tax Laws.
In the above scenario the first party will be treated as Importer and purchasing dealer in India will be treated as High Seas Importer and discharge custom liabilities accordingly.
In case the subjected consignment diverted to any country other than India, it will be considered as merchandise sale and all the tax liabilities of purchasing country would be applicble.
CAclubindia
