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'H' Form in central sale

Bablu Kumar Jha (Accounts Manager) (266 Points)

30 May 2009

anyone tell me the definition of H Forms and its rate

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13 Replies

CMA Poornima Madhava (CMA) (13112 Points)
Replied 30 May 2009

Generally H forms are issued by the branches for stock transfers made from main factory to branches. available at CTD like C forms

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BK Bhargava (Business) (57 Points)
Replied 30 May 2009

Dear friends,

Form H is issued by indian exporter to principal seller in india itself to claim tax exempted sale mainly in the course of EXPORT transactions. When goods under sale is intended for the purpose of EXPORT through recognised exporter attracting zero/exemption of tax, such sale is evidenced by documents/proof of export by such exporter to first point seller (principal) then principal seller and exporter both will have nil tax liability. Due care should be taken that It is complete and genuine not rendered invalid resulting full rate of tax and interest/penalty .

Regards

AK Bhargava

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AMIT KUMAR CHAUDHARY (CA) (159 Points)
Replied 31 May 2009

BAHRGAVA JI REPLY IS RIGHT.

Ravinder (CA) (39 Points)
Replied 01 June 2009

Hi Mr Jha,

'H' form (issued by the sales tax department) is used in penultimate sales (in case of indirect export) . it is issued by the final exporter to the small units who are unable to do export directly.read it carefully:

Export is a specialised business and many small units are unable to export directly. Export is often effected through specialised agencies like Export Houses etc, termed as Merchant Exporters under EXIM Policy. Manufacturers who export the goods themselves are termed as ‘Manufacturer Exporters’ in EXIM Policy. Such indirect exports also need exemption from taxes to make the products competitive. Hence, such penultimate sale, i.e. sale preceding the sale occasioning export is also deemed to be in the course of export under section 5(3) of CST Act and is exempt from tax.

Exemption to penultimate sale is subject to the condition that the penultimate sale (i.e. last but one sale) is (a) for purpose of complying with agreement or order in relation to export and (b) such sale is made after the agreement or order in relation to export and (c) same goods which are sold in penultimate sale should be exported. In other words, the final exporter should be in possession of export order from foreign buyer and should take delivery of goods from the supplier making penultimate sale solely for execution of such export order and export the same goods.

It must be noted that only Penultimate Sale is exempt, but purchases earlier to penultimate sale are not exempt and purchase tax is payable if prescribed.

There must be a pre-existing agreement or order to sell the specified goods to a foreign buyer, last purchase must be after the agreement with foreign buyer and the last purchase must be made for complying with the pre-existing order. Only then the transaction is covered under section 5(3) i.e. it is treated as a Penultimate Sale.

2 Like

K.KAMALAKKANNAN (ASST. MANAGER ACCOUNTS) (24 Points)
Replied 01 June 2009

NIL TAX ON ISSUANCE OF FORM H UNDER CST ACT, SELLER CAN CLAIM THE TAX EXEMPTION AGAINST PRODUCTION OF RELEVANT DOCUMETNS I.E. OF BILL OF ENTRY, EXPORT CLEARANCE DOCUMENTS, INVOICE.

THE FORM ISSUANCE ONLY ON PHYSICAL MOVEMENT OF THE PRODUCT FROM INDIA TO OTHER COUTNRIES