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

Exam Questions

Question 11
Briefly examine the validity of the following statements with reference to the Central Sales Tax
Act, 1956:-

(iii) Penultimate sales for exports is not liable to central sales tax.

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.