Is it necessary to pay GST when dropshipping to foreign customer

Is it necessary to pay GST when dropshipping to foreign customer

I will list items on eBay and whenever someone orders that item, not in India. Then the item will be directly shipped to the customer's address through aliexpress. I will never touch the item.

So, what about GST paying to the govt.?

Here is a similar query
https://www.taxfull.com/8811/dropshipping-and-gst

where you said that GST is mandatory even if the items are not imported and exported.

But here is one guy who is also doing drop shipping business in India. And he says that you don't even need to pay GST if you are not selling to Indian customers. He has established a good business.
See what he says
https://youtu.be/D9LTvKD_8EQ?t=219

Even if I am not liable to pay GST then how will govt. that I am not. I mean if I didn't pay GST they will think my tax return is due.

On the other hand, if I am selling in India on eBay what about taxes?I am just a middleman between a manufacturer and customer.

Will I be called retailer or trader?

Thanks in Advance.

Asked 6 years ago in GST

Generally in drop shipping, GST is chargeable on profit element I.e. commission income.

Please share the following details for apt answers:

1. How invoicing is done?

2. How payments are made and received?

Lakshita Bhandari

CA, Mumbai

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Talk to Lakshita Bhandari

I have some doubts. These are

1) If GST is chargeable on profit, then how will I file tax? Will it be different from a normal tax?

2)Am I a retailer or a trader?

3)Will I pay GST only on Indian business profit or on international also?

Here are answers to your question mam

1.I will pay to Aliexpress(wholesaler in China) on my name and phone number, but the address will be of the customer. Nothing will be printed on the package as they are aware of drop shipping.

2.Customer will pay through PayPal or PaisaPay. Then I will order on the behalf of my customer through PayPal.

Asked 6 years ago

1. Income tax will be same as earlier in addition to GST.

2. You would be classified as a commission agent.

3. It would be on both. Also, for Indian customers, import duties have to be taken care of.

Lakshita Bhandari

CA, Mumbai

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You are acting as an intermediary i.e. agent and there is no threshold applicability on agents for GST registration therefore you need to obtain GST registration without any delay. As an intermediary you need to pay GST on the commission income only. If you raise invoices, you need to charge GST on the invoices otherwise reverse calculation needs to be done for the payments received by you.

You need to pay GST on both the commission income i.e. Indian and International.