High Sea Purchases in TallyPrime: 5 Steps + Example

High Sea Purchase refers to a transaction where goods are sold while they are still on the high seas, i.e., before they have crossed Indian customs boundaries.

This type of purchase is common in international trade.

In TallyPrime, you can easily record high sea purchases and manage them for GST and inventory purposes.

Let’s understand this in simple steps with a detailed example.

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1. What is a High Sea Purchase?

A high sea purchase is when a buyer purchases goods from another party before the goods are cleared by Indian customs.

In such cases:

• The first seller imports goods.
• Before the goods arrive in India, the seller transfers ownership to the buyer.
• The buyer then clears the goods with Indian customs.

GST is not charged on the high sea purchase transaction between seller and buyer. GST is paid during customs clearance by the final buyer.

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2. Example Scenario: High Sea Purchases in TallyPrime

Let’s say:

• ABC Ltd. imports goods worth $10,000 from the USA.
• While the goods are in transit, ABC Ltd. sells them to XYZ Traders under a high sea sale.
• XYZ Traders clears the goods from customs and pays IGST @ 18% during import.

In this case:

• ABC Ltd. raises a High Sea Sale Invoice (without GST).
• XYZ Traders records it as a High Sea Purchase in TallyPrime.

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3. How to Record High Sea Purchase in TallyPrime

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Step 1: Enable GST in TallyPrime

1. Go to F11: Features > Statutory & Taxation
2. Set Enable Goods and Services Tax (GST) to Yes
3. Set up your State and GST registration type

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Step 2: Create Party Ledger

1. Go to Gateway of Tally > Accounts Info > Ledgers > Create
2. Name: ABC Ltd.
3. Under: Sundry Creditors
4. Set GST Registration Type to Unregistered
5. GST applicable: No, since GST is not involved in high sea sale

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Step 3: Create Stock Item

1. Go to Inventory Info > Stock Items > Create
2. Name: e.g., Imported Engine Part
3. Assign unit, stock group, and other details as usual

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Step 4: Record the High Sea Purchase Entry

1. Go to Accounting Vouchers > F9: Purchase
2. Select ABC Ltd. as the supplier
3. Select voucher type as High Sea Purchase (you can rename standard voucher type)
4. Enter stock item, quantity, and value
5. Do not apply any GST ledgers
6. Narration: “High sea purchase of goods from ABC Ltd. – GST to be paid at customs”

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Step 5: Record Customs Clearance Entry (Optional)

If you want to capture customs clearance with IGST:

1. Use a Journal Voucher or Purchase Voucher
2. Debit: Custom Duty Charges, IGST on Imports
3. Credit: Bank Account or Customs Payable Ledger

This helps in tracking landed cost and input tax credit (if eligible).

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4. GST Reporting for High Sea Purchases in TallyPrime

• The High Sea Purchase itself is not shown in GSTR-1 or GSTR-3B.
• The IGST paid at customs can be claimed as ITC in GSTR-3B, under Imports of Goods.

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5. Benefits of Managing High Sea Purchases in TallyPrime

• Complies with Indian GST laws
• Helps in accurate costing of imported goods
• Allows tracking of inventory and import costs
• Ensures correct input credit reflection in returns

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6. Conclusion

High sea purchases are unique because ownership changes hands before the goods enter India.

In TallyPrime, you can record these purchases without GST and manage customs entries separately.

This approach keeps your books clean, GST compliant, and ready for audit or return filing.

By using proper ledgers and voucher types, you ensure that no GST is charged inappropriately, and ITC is properly recorded at the time of customs clearance.