Procedure in respect of issue of H form when dealer is registered in more then one state

Sunday, December 13, 2009, 8:03
GST
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Q.1 The facts are that the dealer is registered under CST Act in Andhra Pradesh as well as in Maharashtra. Order is placed by AP branch on Tamil Nadu dealer for supply of goods against H form. The supplier prepares invoice mentioning Maharashtra address. The goods are delivered by TN party in AP from where dealer exports the goods. The dealer accounts the said invoice of TN party in its books in Maharashtra and shows the same in the Maharashtra Sales Tax returns. The H form issued by Maharashtra authorities is issued to TN party. Whether the above course of action as per law?

Reply

The matter is about issue of ‘H’ form to the TN vendor. The goods are ordered from AP. The TN vendor also supplies the goods to AP place. The goods are exported from there. Therefore, the movement of goods for all the purposes is to and from AP. The general scheme of sales tax law is that the State from which physical movement of goods takes place has control over such transaction. This position is also clear from section 4 of the CST Act, 1956. The said section, which determines

situs of sale for sales tax purpose, is reproduced below.

“4. 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.

Replied By: C. B. Thakar, Advocate

30 Comments on “Procedure in respect of issue of H form when dealer is registered in more then one state”

AMIT MALPANI wrote on 30 December, 2009, 12:54
Dealer register in state of Maharashtra, it purchase goods from dealer in Gujarat & issue form H under MVAT Reg. No. But the goods are exported from state of Gujarat without actually Physically moving to state of Mah. Can it be shown as Purchase in MVAT Return since the dealer is not registered in state of Gujarat.
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rajesh wrote on 7 March, 2010, 6:40
who will issue a h form a supplier or a purchaser
Rani Mangal wrote on 9 March, 2010, 17:49
A person is an Exporter of Garments. He uses plastic bags and paper cartoons for packing the garments. Can this person make purchases of plastic bags and paper cartoons by issuing “H” form? Since garments are exported and plastic bags and paper cartoons are used to pack the garment which is being exported.
Mohammad Faisal Khan wrote on 11 March, 2010, 18:51
Dear Sir , Recently we are facing some problem form Sale tax Deptt to Issue H form against our Export Shipment. We are registered in U.P and Purchasing the material form Maharashtra and export them directly form Maharashtra. Our Question is that should Sale Tax Deptt issue the H form against This type of Export Sale . Kindly reply
Faisal Khan
CA Sandeep Kanoi wrote on 12 March, 2010, 0:16
As you are not registered in Maharashtra so Maharashtra Sales tax Department will not issue H form to you.
Parimal wrote on 14 April, 2010, 16:52
Can manufacturers also issue H form or is it restricted only for the dealers?
Praveen Kapoor wrote on 15 May, 2010, 12:48
A person is an Exporter of Garments. He uses plastic bags and paper cartoons for packing the garments. Can this person make purchases of plastic bags and paper cartoons by issuing “H” form? Since garments are exported and plastic bags and paper cartoons are used to pack the garment which is being exported
shashi churiwal wrote on 22 June, 2010, 16:08
A registered dealer in west bengal places order to a manufacturer in TN. The goods are then exported from TN itself with out any physical movement of the goods another state. Can the dealer from WB issue H form.
G.S.Chauhan wrote on 9 July, 2010, 12:05
we are Delhi based,purchaging the material from Delhi for Export.
What are the formalities with Sales Tax department as we are doing first time?
rajkumar wrote on 26 August, 2010, 13:17
can i export sale agst. central purchase agst. c form
rajkumar wrote on 26 August, 2010, 13:19
we have sale export in how much conditions

local purchase or central purchase agst. c form

or only h form
sandesh wrote on 27 September, 2010, 16:04
local purchase against “form H” within maharashtra state for that transaction where to be show in MVAT Return form 232?
santosh wrote on 15 October, 2010, 17:03
I am propitor buy Iron ore & sell with in own Pvt ltd co. Now who will issue the H Form

Is there is VAt on inter co. transfer of ore
is it difficulty will arise to the seller issued the Invoice to Propitor & Form H issued by Co.

Please explain
shaki wrote on 23 November, 2010, 21:20
our question is whether a manufacturer can issue a form h to a raw material supplier?

we are radiator manufacturers and exporters, we buy the raw material from dealers & manufacturers from different states.

Against our raw material purchases we would like to issue form H for exemption of tax.

Kindly suggest us as per the cst act.
S.N.DUA wrote on 21 December, 2010, 15:46
DEARS

MY COMAPANY REGISTERED IN DVAT AT DELHI SALES TAX OFFICE.I CAN BY GOODS AGST H FORM FROM A LOCAL PARTY IF THIS GOODS IS FOR EXPORT PURPOSE.PLEASE CLARIFY :
My email -snduadelhi@gmail.com
R.SELVAKUMARAN wrote on 3 January, 2011, 19:17
We want an assistance from you to find the following details

we are a company in tamilnadu carrying out exports as a merchant exporter.

(1) we had given a Form H for exports of a water treatment chemical under our product code ECOCHEM EP 105106 We had exported this under this trade name.

We had purchased this product under the trade name CH 0095 ARONFLOC C- 510 POLYACRYLAMIDE

there is the above product exported in the same quantity.

(2) Similar change of coding is done for another product, but also add other chemicals to make greater quantity, say we purchase 10 kgs and we make 20 kgs of product mixing with a reactive agent and water.

Now Mumbai company whom we purchase this product is not ready to accept Form H as their sales tax consultant has advised them that the product should be exported as it is and no value addition should be done and also we have to mention the same trade name in the bill of lading.

Kindly help us to find a export sales tax or form H explanation or rule of sales tax which says that the product can be exported otherwise or value addition can be done.

regards
R.Selvakumaran
deepak wrote on 22 January, 2011, 11:37
sir
procedure of issuing of h form. My point that i purchase material from a registered dealer in ap and my company also registered dealer in ap. now i issued h form to my principak but department saying material procure before purchase order from foreign buyer so h form cant be issued. pl let me know what is the procedure and what rule says. help me out
Ramesh Salian.P wrote on 14 February, 2011, 9:25
Dear Sir,

We are 100% Export Oriented Unit (EOU) manufacturing of Pharmaceuticals & Nutracutical products, we have purchased the raw material from another 100% EOU at Tamilnadu. The raw materials has been reprocessed and exported and we have issued the H form for EOU. Whether this transactrion is ok for issuing H form?

Pls adive.

Thanks & Regards

Ramesh Salian.P
R.Prakash wrote on 2 March, 2011, 17:31
Dear Sir,

We have purchased the raw material from other state agst issue of form H . Also We are 100% Export Oriented Unit (EOU) manufacturing of plastic tapes, and we also made sales to the same 100% SEZ Unit at tamilnadu. since we need are in first transaction abour these , we need what are the procedures for issuing H form and what are the enclosures while issuing the H form.

Pls adive.

Thanks & Regards

R.Prakash
Cheprakash_84@yahoo.co.in
shamala wrote on 12 March, 2011, 14:10
We are manufacturere on chemicals equipments / plants, can we issue fom ‘H’ to the suppliers of maharashtra as well as to other states The goods are used in manufacturer on our platns
Rajesh wrote on 25 March, 2011, 15:33
We import some oil in our EOU unit , This import for reprocess and then export it., kindly suggest procedure for this transaction from your side ….
Venkat wrote on 9 April, 2011, 15:35
Dear sir, can a manufacturer exporter procure raw material by issuing H form for using in manufacturing of final product and further export. Pls advice
Mangesh wrote on 9 April, 2011, 16:39
If a dealer is register in Karnataka and If he make a export sale fromGoa and purchases are also from goa aginst h form where he is not registered in that period but registered in subsequent year. now my question is in which state i should apply for H form?
Aditya Mundhra wrote on 13 April, 2011, 13:21
Our client is a dealer based in Maharashtra. He purchases goods from Delhi for the purpose of Export and issues Form H to the seller. I want to ask are there any other obligations if our client does not take the delivery and asks the seller to export the goods directly from Delhi. Does point of dispatch matter in issuing Form H?
Lakshmanan K K wrote on 3 May, 2011, 9:07
Dear Sir,

Background : We are manufacturer of Gearbox for windturbine & located in an SEZ unit in coimbatore. We have received an purchase order for Gearbox from our overseas buyer. He has asked us to bill it to him (overseas) and ship the goods to another SEZ in karnataka. The SEZ unit in karnataka will assemble all the products including ours and finally export the same outside teritory of India. Overseas entity along with SEZ unit in karnataka as a contract for doing jobwork for them.

Query : In this case Whether FORM-H will be applicable for this kind of transaction ? if not, what is the procedure to be followed in this case. kindly provide your feedback.
Vivek Gupta wrote on 25 August, 2011, 17:48
Dear Sir,

For Example there are three Dealers X, Y and Z all registered in Goa, We (Y) Buy Iron Ore from Z and sell this material to X, Now X exports the Iron Ore and issue’s Form h to us (Y), Now My Question is “Can we (Y) issue Form H to the Party Z or Not????
K.PRAKASH wrote on 29 August, 2011, 12:56
DEAR SIR,

WHETHER FORM H ISSUED QUARTER WISE FROM WHICH YEAR PLEASE ADVISE AND NOTIFICATION NO

THANKING YOU,

K.PRAKASH
ROHIT wrote on 23 November, 2011, 11:51
no
Anand wrote on 19 January, 2012, 17:42
what is d proccess of Apply H Form ?
Plz send me detain in my email id.
Email : anand_rathod16@yahoo.com