Switch Bill of Lading

Switch B/L is the new set of b/ls issued upon customer’s request in exchange of the first set of original bill. This is also called ” the traders’ second set”. Switch b/ls are intended to keep the identity of the supplier from the sub purchaser and thus to prevent future direct dealing between the supplier and the sub purchaser. Shipper, Consignee and Notify are the information that are most commonly requested to be changed by the traders. Due care and consideration must be exercised when issuing such bills of lading because of inherent exposure to fraud/conversion of factual data . Furthermore, the agent at POD must confirm that amendment may be performed without fines. If amendment is done too late, cargo declaration may already have been done or even cargo may already been discharged, leading to fines / costs for amendments. These fines/costs are to be borne by the party requesting the amendment.

HIGH SEA SALE.

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.