1) No this has got legal issues . Firstly you are availing storage services from U S Vendor and such services are consumed in India, this may attract 14% service tax on fee paid as rent for storage services. Secodndly you have to obtain IE code from DGFT, and you are importing storage services, kindly take permission RBI for releasing payments in foreign exchange. Kindly check Foreign Trade Policy, to clear position on import duties. There is no problem as far as receiving payments by credit card from your customers in India. 2) If you are selling software as a packaged product, such as Tally, EX or others, then this will attract VAT under concerned state VAT. If you are offering software services such development, or customisation then you will have to collect 14% from your customer. 3) You will have to get the agreement between you and US Vendor, to check whether the transaction is hit by provisions of Tax deduction at Source under Income Tax Act, which is very harsh provision.