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Form-h

V.Marimuthu (Finance Excecutive-Indirect Taxation) (376 Points)

31 March 2016

Dears Please clarify my doubts. X Ltd (Manufacturer,Tamilnadu), Y Ltd (Buyer,Maharashtra), Z Ltd (Third party, USA). X Ltd sold goods to Y Ltd against CT-1 and Form-C. Y Ltd PO showing they are Export to Z Ltd(USA). in this situation Y Ltd issue CT-1 and Excise Duty will not be applicable ED=0 My Doubts 1) Y Ltd issue CT-1, Whether Y Ltd should be Export the purchased goods from X Ltd. or can use other? 2) if buyer issuing CT-1 whether they should issue Form-H for CST Purpose? 3) if buyer issue CT-1 and Form-C also , whether this transaction is correct?

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CMA Poornima Madhava (CMA) (13112 Points)
Replied 31 March 2016

Y Ltd is the merchant exporter who has issued CT1 to the manufacturer. Thus, manufacturer can clear goods without payment of excise duty.
Form C will be issued by the buyer for interstate sale (between manufacturer & buyer) at concessional rate of CST.
Both are 2 different aspects: one relates to ED and the other to CST.
Actually, interstate sale can be treated as penultimate sale of export and it is exempt from CST against issue of form H by the exporter.