Procedural safeguards High Sea sale cs executive professional notes
The following procedure should be followed to effect High Sea sale:
(i) The Indian buyer and seller should enter into a formal contract. If there is no contract, at least there should be exchange of letter.
(ii) The contract must clearly stipulate the rights, duties and obligations of the parties to the contract. It should have clear provision regarding discharge of statutory obligations such as payment of duty and disclosure of information.
(iii) If the seller agrees to the receipt of the price of the goods at a later date, it should be clearly mentioned that the transfer of property will take place as soon as the documents in question are endorsed and delivered to the buyer although the payment of the price of the goods may be made at the future date.
(iv) The High Sea buyer should file the declaration form under rule 10 of the Customs Valuation Rules. 1998.
(v) The High Sea buyer should file the Bill of Entry in his name only.
(vi) The importer must retain copies of the bill of lading duly endorsed in favour of he buyer where the sale is made in the course of import. Ordinarily, the original negotiable copy of the bill of lading is surrendered to the shipping company. It is, therefore, absolutely necessary that photo copies of these documents clearly showing the endorsement of these should be kept by the seller and buyer.
(vii) A question often arises as to whether the endorsement should bear any date. It is not mandatory to record such a date of endorsement but it will be essentially the burden of the seller to show that the sale by endorsement was effected before the goods had crossed the customs frontier.