• GST on drop-shipping

Hello this is Eric 
So let me explain my business model first 
Im an Ebay USA seller on ebay,com
My Turnover is less than 20lakh per year
I source my product from china 
Whenever I get orders (costumer pay me by Paypal )i forward the order to my supplier based in china and they ship the product I pay them by (credit card) To my customers … I don’t make any invoice for my customers they get my suppliers invoice ,, I do just act like an middle man ,, today Ebay has stopped my listing because of GST (I didn’t provided) , Now the question is What kind of GST registration do I need?
And do I need to collect GST from my customers if yes then HOW ?
Asked 6 years ago in GST

Yes,

For ecommerce retail, you need to apply for GST irrespective of your turnover.

Econmerce companies don’t list unregistered vendors as on date as it increases their compliances and cost both.

Thanks,

CA Sourabh Pahuja

Sourabh Pahuja
CA, Delhi
78 Answers
1 Consultation

5.0 on 5.0

Yes you will need to get registered and provide your GST number to Ebay. It is compulsory to get registered with GST in order to be listed with an ecommerce site.

Hope that clarifies.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Hi Eric..

Since your turnover is less than 20 lakhs, you are not liable to GST registration. Please communicate with eBay about the same. Earlier in the law you were liable for registration, but post amendment, you are exempted.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Dear Sir,

The services provided by you falls into the category of Intermediary under GST. As you are acting as an middlemen between China supplier and customer, you need to obtain the GST registration compulsory irrespective of your turnover. Please apply for GST registration as an Intermediary on GST portal and share the GSTIN with the E-bay. Please charge GST on the amount of commission earned by you @18%.

Thanks

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

Hi Eric,

For doing business under ecommerce you need to compulsory obtain GST irrespective of turnover. You need to pay GST on the commission amount on the product sold in India.

Feel free to contact in case you require further clarification

Vidya Jain
CA, Kolkata
1008 Answers
58 Consultations

4.8 on 5.0

If you are registering under GST, 18% GST shall be charged on your profit element as commission income. This 18% shall be paid to government; no refund.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Say you sale something for INR 100 in USA which is purchased for INR 200, 18% on INR 100(200-100) I.e. INR 18 has to be paid as GST. There would be no refund for this GST paid.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Since place of provision of service of intermediary services is place of service provider as per GST laws, so your place i.e. India becomes place of provision of service and thus this service doesn't qualify for export.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Then Eric, kindly clarify how do you connectc from India :

1. Your supplier is from China

2. Product are sold in usa

3. Is Ebay registered in India?

Vidya Jain
CA, Kolkata
1008 Answers
58 Consultations

4.8 on 5.0

Dear Eric,

As you are located in non-taxable category and providing service being an middlemen and not selling products in India. You need to register yourself as E-bay is an domestic Indian Company and you are proving service using E-bay portal in India. E-bay will charge you commission and other charges and will deduct TCS on that amount for which you can claim ITC credit before making final payment.

Thanks

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

Since the service is being provided from India, the commission will be chargeable under GST and 18% levy will be done on the differential or your commission margin.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Dear Sir,

According to me just apply for the GST registration no. and share with the E-bay. Don't charge GST on the commission amount as you are located in USA i.e. non-taxable territory and you are providing services to China supplier. Just because you are supplying through Indian portal that's why it is required. If you can use Amazon USA portal I don't thin, amazon USA will ask for GST No.

In your case both the location of supplier and place of supply is outside India so therefore no GST would be applicable.

Thanks

Vivek Kumar Arora
CA, Delhi
4825 Answers
1030 Consultations

5.0 on 5.0

Hi,

In case your turnover is going to be more than 20 Lakhs you need a GST Registration.

Also please mention whether the amount received by you is in foreign currency or local INR.

Also, please note that as per the model explained by you, your place of providing service shall be considered in India only since there is nothing you are delivering outside India neither Goods nor Services. Hence you are liable for GST @18%. You will not qualify for benefits as exporter of services.

Regards,

Sunny Thakral
CA, Delhi
224 Answers
8 Consultations

5.0 on 5.0

Query raised to Lakshita & Vidya

Keerthiga Padmanabhan
CA, Greater Mumbai
784 Answers
27 Consultations

5.0 on 5.0

Yes, you are correct. Your services fall under the category of intermediary services.

You need to charge 18% GST and pay it o the government.

Please feel free to call/ revert in case you need more clarity.

Thanks and regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Hello,

Yes, you will have to register yourself under GST as it is mandatory for E-Commerce Operations.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, FCA, LLB, CERT. FAFP

Rohit R Sharma
CA, Mumbai
2104 Answers
95 Consultations

5.0 on 5.0

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