Regarding export

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 October 2014 Respected Experts,

My question is my firm is in business of Export of cotton. we purchase cotton against Form H and exports the same.

But, one of our creditor from whom we purchase, has given the tax invoices and refuse to give invoice in Form H. So, now what can I do ?

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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01 October 2014 but what is the reason for not giving u H form?

Querist : Anonymous

Querist : Anonymous (Querist)

01 October 2014 They denied to give Bills under H form as they had already issued bill in VAT 4%. and there is also some problems in payment issues.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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20 July 2025 In your case, the situation involves a mismatch in documentation for an export transaction. Here's how you can understand and handle it:

🔍 Background:
Form H under the CST Act, 1956 allows a seller to sell goods to an exporter without charging CST, provided the goods are meant for direct export and the exporter furnishes Form H.
This helps avoid double taxation since the goods are ultimately leaving the country.
If the supplier has already issued a VAT invoice charging 4%, they are treating it as a domestic sale, not an export sale.
🛑 Problem:
Your supplier is not treating the sale to you as an export, which means:
They will not accept Form H from you.
You cannot claim exemption under Form H for that purchase.
You may face tax mismatch in your export documentation (especially if you claim export benefits like zero-rated supplies).
✅ What You Can Do:
1. Negotiate With Supplier:

Request them to revise the invoice and accept Form H if the export conditions are met (i.e., you exported the same goods as purchased, within 6 months, and can provide shipping documents).
Clarify payment terms if that's causing hesitation.
2. If Supplier Refuses:

You cannot force them to issue Form H–compliant invoice if they’ve already paid VAT on the sale.
Treat the purchase as a domestic taxed purchase (VAT paid at 4%).
You won’t be able to submit Form H for that transaction.
Adjust your export records accordingly and exclude this purchase from H-form filing.
3. For Future Transactions:

Clearly mention in your purchase orders that the goods are meant for export, and you’ll issue Form H.
Ensure suppliers are willing to issue Form H–compliant invoices before finalizing purchase.
⚠️ Important Notes:
Filing incorrect Form H or claiming it on ineligible transactions can lead to penalties and tax liability during VAT assessments.
You can claim input tax credit (if applicable in your state) for the 4% VAT paid if not eligible under Form H, provided you're registered under the local VAT/CST laws.

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