Local sale in up of packaing material to exporter

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Anil (Querist)
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14 August 2013 Sir,
Our company is in UP. We had made sale of Corrugated box in UP to Manufacturer-Exporter. They are giving us Form E for Exemption of VAT. But the Commercial Tax Department is demanding us for RITC of That sale made by us.

Can the exporter give us Form H against above said sale?

Thanks.

Anil

Anil (Querist)
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22 August 2013 is Nobody there to reply my qurey?

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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03 August 2024 In the context of local sales of packaging material to an exporter in Uttar Pradesh (UP), here’s how you should address the VAT exemption and the use of relevant forms:

### **Understanding the Forms and Exemptions:**

1. **Form E (Uttar Pradesh VAT):**
- Form E is used in Uttar Pradesh to claim exemption from VAT on sales made to manufacturers who export goods outside India. The purpose of Form E is to facilitate the exemption from VAT for goods that are used in the manufacture of export goods.

2. **Form H (Central Sales Tax Act):**
- Form H is used under the Central Sales Tax (CST) Act for claiming exemption from CST on inter-state sales to exporters. It is specifically for transactions where the goods are sold and transported to another state, and are used in the manufacture of export goods.

### **Scenario Analysis:**

- **Sale of Packaging Material:**
- Packaging materials sold to exporters are typically used in the export of goods. Therefore, such sales may be eligible for VAT exemption.

- **Form E for VAT Exemption:**
- Since the sale is local (within UP), Form E is the relevant form for claiming VAT exemption. The Form E is issued by the buyer (exporter) to the seller (you) to declare that the packaging material is used in the manufacture of export goods and is thus eligible for VAT exemption.

- **RITC (Reversal of Input Tax Credit):**
- The demand for RITC by the Commercial Tax Department usually arises when a seller cannot substantiate the exemption claim properly or if there is an inconsistency in the documentation. RITC pertains to the adjustment or reversal of Input Tax Credit if the conditions for exemption are not met.

- **Form H for VAT Exemption:**
- Form H is not applicable for local sales. It is meant for inter-state sales under CST. Since your sale is a local sale within Uttar Pradesh, Form H is not relevant for claiming VAT exemption.

### **What You Should Do:**

1. **Provide Form E:**
- Ensure that the exporter provides you with Form E to claim VAT exemption on the sale of packaging material. This form certifies that the packaging material is used for the manufacture of goods that are exported out of India.

2. **Clarify with the Commercial Tax Department:**
- If the department is demanding RITC, it may be due to a lack of proper documentation or discrepancies. Provide Form E and other relevant documentation to substantiate the exemption claim.

3. **Consult with a Tax Professional:**
- It is advisable to consult with a local tax expert or accountant to resolve the issue with the Commercial Tax Department and ensure that you comply with all requirements for VAT exemptions on local sales to exporters.

### **Summary:**

For local sales of packaging material to an exporter in Uttar Pradesh, Form E is the appropriate document to claim VAT exemption. Form H is not applicable in this scenario as it pertains to inter-state sales under CST. Ensure that you provide Form E to support the VAT exemption and address any issues or demands from the Commercial Tax Department by presenting the correct documentation.

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