Applicability of 'H' Form in sale of goods

[d.v. gupta]

we are selling goods to a delhi dealer. we are also registered in delhi. the purchasing dealer is purchasing goods to export. they want to purchase against 'H' form. whether it is legal to sale goods to delhi dealer against 'H' form.

[ASHWIN GALA]

YES.

[Rama Krishana]

Yes, the sale in the course of interstate sale and sale in the course of export are two different sales. Therefore, a dealer can purchase the goods from the other dealer against 'H' for export.

[Sanjay Aggarwal]

What happens to the VAT paid by Seller (at the time of purchase)??

Are there any changes recently to position stated above??

[YAGAY andSUN]

Dear Sanjay,

In this scenario there is no need to reverse the Input Tax Credit. As export is zero rated sales.

Regards

YAGAY and SUN

Management, Business and Indirect Tax Consultants

[Sanjay Aggarwal]

Thanks for response. Let me provide complete scenario:

We are registered dealer in Delhi VAT. We purchase goods from Delhi Vendor for Rs 100 lacs and pay 12.5% VAT.

We sell ₹ 10 Lacs worth of goods to Exporter against Form H. Rest is normal sales in Delhi.

My question is whether I can avail Tax Input Credit corresponding to Export Sales to set off VAT liability against my other normal Delhi Sales?

Thanks in advance.

AI Summary

H form applicability permits sales to a registered dealer for export while preserving input tax credit for local VAT. A seller may sell to a dealer in the same State against an H form when the purchasing dealer acquires goods for export; permissibility depends on the buyer's export purpose rather than shared State registration. Export sales are treated as zero rated for VAT, and contributors advise no reversal of input tax credit for exported goods. The discussion raises, without resolving, whether input tax credit attributable to export sales can be applied to offset the seller's VAT liability on other local sales.