No CST on Penultimate sales (second last sales) for Export
We know that there is no VAT or CST on Export
However, if goods are sold to exporter who finally exports it abroad
There are 2 sales
- Sale to Exporter
- Sale by Exporter to foreign party
On sale to Exporter, VAT is applicable if Exporter is within state, and CST is applicable if Exporter is outside state. On this, if Exporter gives H Form, then no tax shall be payable.
Hence, sale to Exporter is penultimate sale which is exempt from tax as Exporter is providing H Form
What is H Form?
- It is a form given in case of Penultimate sale prior to Export
- It is given by buyer (Exporter) to seller.
- It is given both in case of Local and Interstate sales
Briefly examine the validity of the following statements with reference to the Central Sales Tax
(iii) Penultimate sales for exports is not liable to central sales tax.View Answer
Yes, the statement is valid. Since penultimate sale for exports is deemed to be the
sale in the course of exports, it would not be liable to central sales tax.