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form H Issue

Selvakumar (Accountant) (33 Points)

30 July 2010

In which conditions, an exporter will give form H to his suppliers.

Is Vat is applicable for the suppliers even if he get form H?

If form H is not issued, what will be happened?

Is there any about Form H.?

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4 Replies

Harpreet (* * * * * *) (1670 Points)
Replied 30 July 2010

Kindly read, It may be useful for you.

When is a sale or purchase of goods said to take place outside a State

(1) Subject to the provisions contained in section 3, when a sale or purchase of goods is determined in accordance with sub-section (2) to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States.

(2) A sale or purchase of goods shall be deemed to take place inside a State, if the goods are within the State –

(a) in the case of specific or ascertained goods, at the time of the contract of sale is made; and

(b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation.

Explanation:– Where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of this sub-section shall apply as if there were separate contracts in respect of the goods at each of such places”

In above case, the goods are received at AP. They are exported from there. Therefore, as per above section 4 of the CST Act, 1956, the situs of such export sale is in AP. Therefore, it is State of AP, which has jurisdiction over such transaction. The form facility is created to have control over the purchasing dealer. When the dealer approaches sales tax department for obtaining the blank forms, the sales tax department is in position to identify such dealer and can exercise its control over the said dealer, like they can watch the disposal of the goods purchased against said form. Therefore, impliedly it means that the purchasing dealer should obtain the forms from the jurisdictional state. In above case, even if, the vendor’s invoice is at Maharashtra office, the transaction for the purpose of sales tax laws is taking place at AP. Therefore, the dealer should use the ‘H’ form of the AP state.

This position can also be seen from another angle. The issuing of ‘H’ form to the vendor is provided in Rule 12(10) of the CST (Registration & Turnover) Rules, 1957. The said Rule is reproduced below for ready reference.

Rule 12

[(10)(a) A dealer may, in support of his claim that he is not liable to pay tax under this Act in respect of any goods on the ground that the sale of such goods is a sale in the course of export of those out of the territory of India within the meaning of sub-section (3) of section 5, furnish to the prescribed authority a certificate in Form “H” duly filled and signed by the exporter along with the evidence of export of such goods. 3[***]

(b) The provisions of the rules framed by the respective State Governments under sub-sections (3), (4) and (5) of section 13 relating to the authority from whom and the conditions subject to which any form of certificate in Form “H” may be obtained, the manner in which such form shall be kept in custody and records relating thereto maintained and the manner in which any such form may be used and any such certificate may be furnished in so far they apply to declaration in Form C prescribed under these rules shall mutatis mutandis apply to certificate in Form H.]

It can be seen that as per Rule 12(10)(b), the provisions made by State Government in respect of issue and receipt of ‘C’ form are applicable to ‘H’ form. In the CST (Bombay) Rules, 1957, Rule 4AA provides for obtaining or giving declarations in Form ‘C’. The said rule is reproduced below for ready reference.

4AA. Declaration forms to be obtained and given from delivery State. —

(1) Where a registered dealer claims to have made a sale in the course of interstate trade or commerce to another registered dealer and under instructions has delivered the goods to the purchasing dealer in another State, the declaration by the purchasing dealer to be produced by the selling dealer before the assessing authority shall be in a form obtained by the purchasing dealer from the authority in that State:

Provided that, if the purchasing dealer is not registered in the State in which the goods have been delivered, then the declaration shall be in a form obtained by him from the authority in that State in which he is registered.

(2) Where any goods are sold by a registered dealer to another registered dealer in the course of inter-State trade or commerce as a result of which the goods are delivered to the purchasing dealer in the State of Maharashtra, the declaration to be given by the purchasing dealer if he is registered in this State, shall be in a form obtained under sub-rule (1) of rule 4.]

As per sub-rule (2) of above rule 4AA, the ‘C’ form of Maharashtra is to be issued, if the goods are delivered in Maharashtra and the purchasing dealer is registered in Maharashtra. Thus, the rule does not contemplate to issue ‘C’ forms from Maharashtra, if the delivery of the said goods is not in Maharashtra. If at all, the dealer is not registered in the actual state of delivery then he can issue ‘C’ form of Maharashtra. The same position will also apply to ‘H’ form.

In above case, the goods are delivered in AP, as well as the dealer is also registered in AP under CST Act, 1956. Looking to the above legal position, the dealer should issue ‘H’ form from AP. The export turnover in relation to above purchases against ‘H’ form should also be shown in AP returns and not in VAT returns of Maharashtra.

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Harpreet (* * * * * *) (1670 Points)
Replied 30 July 2010

Certificate in form H - Sale during course of export is exempt from CST. As per section 5(3) of CST Act, penultimate sale is also deemed to be in course of export and is exempt from CST. Dealer actually exporting the goods has proof of export like customs documents, bank certificate, airway bill/bill of lading, shipping bill etc. However, the penultimate seller does not have any direct evidence to prove that his sale is exempt from tax. In such cases, the actual exporter has to issue a certificate to the penultimate seller in form H. The blank ‘H’ forms are to be obtained from sales tax authority by the final exporter.

Harpreet (* * * * * *) (1670 Points)
Replied 30 July 2010

Thats only for your knowledge.

That ajdksflasThats for Prescribed forms under CST

Following are the forms prescribed under CST (Registration and Turnover) Rules, 1957.

Form	Descripttion	Frequency
A	Application for registration	Once
B	Certificate of Registration	Once
C	Declaration by purchasing registered dealer to obtain goods at concessional rate	To be obtained for every quarter and submitted on quarterly basis
D	Form of certificate for making government purchases (D form cannot be issued in case of sale made to Government on or after 1-4-2007)	No question arises after 1-4-2007.
E-I/E-II	Certificates for sale in transit	To be obtained for every quarter and submitted on quarterly basis
F	Form by branch/consignment agent for goods received on stock transfer	Monthly, but to be submitted to authorities quarterly
G	Indemnity bond when C form lost	When required
H	Certificate of Export	Upto the time of assessment by first assessing authority.
I	Certificate by SEZ unit	Not specified in rules (but should be submitted before assessment).
J	Certificate to be issued by foreign diplomatic mission or consulate in India or the UN Agency	Upto the time of assessment by first assessing authority.