Drop shipping and GST charges

Hi ,

As per the mentioned business model, I understand that you are importing goods and then in turn exporting them via online portal.

Considering the GST regime, all the ecommerce businesses are mandatorily required to register under GST. Thus, GST is applicable in your case irrespective of any limit.

Secondly, if the goods you are exporting are NIL or Zero rated under GST rates, then you may apply for Letter of undertaking with the GST department by which you would not be liable to pay GST on exports. However, registration and filing of the GST returns is still required as the reporting of all the business transactions is mandatory in case of interstate supplies ( includes imports and exports).

Thanks

Damini

Hi

Your services shall be classified as intermediary services and the profit element i.e. commission amount shall be taxed @18%.

There's no exemption for registration on case of intermediaries. You need to register under GST mandatorily.

Also, this would not amount to export of service. According to Place of provision rules, place of provision of service for intermediary service is place of service provider and hence, India. GST @18% would be applicable; no export no refund.

I understand this is drop shipping model. There is no threshold available. You have to get registered compulsorily.

If the customer is in India, there would arise liabilities for import duties. Payment of import duties differ from case to case. In most of the cases, it is paid by the customer through the courier/postal agency. Also, gift packages upto Rs. 10000 are free from import duty.

In both the situations, you have to take care of GST

If you are importing and export, then apart from GST registration you would also need Import Export code registration.

Dear Sir,

You are acting as an e-commerce operator for both suppliers and customers. You are providing services to the customers located outside which will be treated as export of services. You need to apply for GST registration as an e-commerce operator and you are required to submit bond to the GST authorities for export of services without payment of duty otherwise pay tax and get the refund later. There is no threshold limit for E-commerce operator operating from India. The only difference lies in the export or domestic transactions.

If you sell them in india, proceeds will be collected by you on behalf of customers as you are direct interface to them and remit the proceeds after deduction of TCS and collection of GST on your charges (i.e. commission, shipping etc.). TCS is deferred till 31.03.2018.

Thanks

Hi,

1. Yes, you need to take GST registration immediately irrespective of your turnover.

2. You need to charge GST @18% on your profit part.

Yes, if you are selling the goods to Indian customer, you will also need to figure out about custom duties.

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

Thanks and regards

Abhishek Dugar

CA CS B.Com

Hi,

You are liable to register under GST since you will be raising your invoices outside India that too in foreign currency. If you don't get register, you will not get any benefit of input tax that may accrue to you.

As far as basic exemption criteria is concerned, it is only for those who have/ intend to have no input tax credit.

Regards,

Dear Sir,

1) Monthly return in the form of GSTR-8.

2) https://cbec-gst.gov.in/gst-goods-services-rates.html. You can search on this weblink.

3) Consideration should be in foreign convertible currency which is in US dollars. I think that is sufficient.

Thanks

If your turnover is below 1.5 crores, you will have to file GSTR 3B monthly and GSTR 1 quarterly. Payment of taxes will be done monthly.

SAC code would be 996211.

There should not be any problem with the foreign currency exchanges. For remittance outside India, no problem till USD 250000. However, a FEMA expert can guide you better with this point.

Dear Sir,

I don't think you should be considered as Intermediary. Trading of goods over internet is e-commerce. You have to register as an e-commerce operator and not as a normal supplier. GSTR-3B and GSTR-1 is applicable to normal taxpayers. Intermediary are brokers and agents defined specifically by the GST laws.

As per Lakshita definition of intermediary, Amazon and flipkart should also be treated as Intermediary instead of E-commerce, meaning thereby no one will fall in the definition of e-commerce.

As per GST law, your nature of services falls under the e-commerce operator.

Thanks

Hi,

1) You need to file GSTR 1, 2, 3 and 3B along with GST RFD 01A to claim any refund of GST paid or input tax available for refund. Frequency is monthly for 1 and 2 Quarterly for 3, but as of now only 3B monthly. That too provided GSTN portal works and dates/ periodicity are not frequently changed/ extended.

2) Your SAC applicable appears to be:

996211 - Services provided for a fee/commission or contract basis on retail trade

However, it depends upon further discussion and looking at nature of services.

3) For receiving payments in USD, you need to follow FEMA guidelines. There are no limits for inwards remittance of USD on revenue account. If you qualify as exporter of services, you will be eligible for refunds/ exports without payment of IGST, after following due process.

Regards,

It appears that the query has already been answered by other experts. Feel free to get back in case any part of it has been left unattended.

I seems your questions has already been answered. In case for further details plz feel free to ask.

Hi,

1. You will have to file GSTR3B monthly and GSTR1 monthly/quarterly depending upon your turnover.

2. 996211

3. No.

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

Thanks and regards

Abhishek Dugar

CA CS B.Com