Today we are going to discuss on Form H and Form F sales. Form H is used for the export sales and Form F is used for branch transfer. Form H is issued by the Export trader to the supplier of the goods and form F is issued by the Head office to the branch for transfer of raw material, finished goods etc.
Why Form H is Needed?
When a person sales taxable goods to another person then he is liable to charge VAT & deposit the same to the government. A buyer of goods can avail the input tax credit for the same if he sells the goods to other party.
Now if the buyer of the goods turns out to be an exporter then he can’t have an option to avail input tax credit, it will create a burden on the buyer. So to avoid such circumstances, Form H concept is introduced.
According to this concept if seller sells the goods to the exporter, then he is not liable to charge VAT or CST if the exporter produces Form H to the seller. By producing Form H to the seller an exporter can relieve himself from the VAT or CST liability.
Can a exporter issue form H to manufacturer and dealer?
Yes an exporter can issue form H to Manufacturer and dealer.
Who can issue Form H ?
An export trader can issue form H, Note if an exporter purchase the goods and make some manufacturing activity than he can not issue the form H. Form H can be issued for the same goods.
Example of Form H:
Suppose there are two parties Amit – seller , Akshay – purchaser
If Amit sells goods to Akshay of Rs. 1000 & charge Vat @ 5%
Total amount paid by Akshay is Rs. 1000+50(vat). If Akshay sells the goods to another person then he can avail the input tax credit to Rs. 50. Now if Akshay turns out to be an exporter then he can’t have an option to avail the input tax credit of Rs. 50.
To overcome from this situation, Form H concept is introduced.
Now if Amit sells the goods to Akshay (Exporter), then Amit is not liable to charge VAT if Akshay produces Form H to the Amit. By producing Form H to Amit, Akshay saves himself from VAT liability.
Why Form F is Needed?
When a firm sends the goods to the branch office in another state, then the firm sends the goods is liable to charge CST & pay the same to the credit of government. It will create liability for the same firm selling the goods. To overcome from this situation Form F concept introduced.
According to Form F concept, if a firm sells goods to his branch office in another state, then he is not liable to charge CST if the Form F is issued by the Branch office. By issuing Form F to the head office, Branch office can relieve himself from CST liability.
A head office can transfer stock to branch office in another statefor sale.
A Firm can transfer stock to his agent in another state for sale.
