Hi
1. No, you don't need any separate license. GSTN is sufficient.
2. Please let us know in detail, how the things will work. Who will raise invoice to the ultimate customer? Retailer or you? Will you raise any invoice on retailer?
Retail
HI , I run a sole proprietorship clothing brand . I am looking forward at entering into tie-ups with retail stores now for the sale of my brand clothings .I understand there is no VAT now , it's just GST - 12% Above 1000 price and 5% below 1000 . 1). do i need to apply for a license to be able to do this ? I have a GSTIN . 2). The owner of the retail store would charge a certain % of the sales made at their store from me . What will be the tax liability on me ? Please clarify . Thanks
Asked 6 years ago in VAT
Hi
1. No license is compulsory. GSTN would be sufficient.
2. How things will work out? Will they be working as commission agents or firstly sale transaction will be done with them?
Hi,
1. GSTN should be sufficient. No separate license required.
2. Can you elaborate the scheme of arrangement.
Regards,
Nikhil.
Thank you guys . For the second part of the query , I would be getting into an agreement with the retailer to sell my items on consignment . For which I would be paying a Minimum Guarantee. The revenue commission would be split up when the sales to the customer is made . The retailer will be raising an invoice to the customer . I would appreciate if you could let me know the liability in both cases : if I raise an invoice to the retailer and or on commission basis .
Asked 6 years ago
1) As you are already having PAN and GSTIN, there is no need to apply for any other licence under sole proprietorship.
2) I should suggest you should raise invoices to the customer and pay commission as per the agreement.
Commission basis would not be a good option. In this case, GST shall have to be charged by you when good are sent on consignment even when no consideration is paid. GST has to be paid considering sales value as normal market value of goods or 90% of the same. The consignee can take ITC for such GST . Consignee will charge GST in invoice to customer and also raise an invoice for commission on which GST shall be charged at 18%.
The above shall involve complications.
So, the best way is to send goods on approval basis. When the goods are sold to customer, consignee will issue invoice to the customer charging GST and consignee will issue invoice to the consignor on the same date. The consignee will claim the ITC.
This is just like a normal purchase sale transaction except the fact that good were sent beforehand
If the goods sent on approval basis are not sold within 6 months, invoice needs to be issued by the consignor to the consignee charging GST or the goods could be returned back.
From the GST perspective, it is better not to opt for commission basis as a separate GST will have to be paid on commission
It's better if you opt for normal purchase sale basis or sale of goods on approval basis.
It is advisable not to opt for commission basis as additional GST will have to be paid on commission. It's better if you opt for normal purchase sale basis or sale of goods on approval basis.
Regards,
Nikhil.
Taking commission basis will attract gst so its advisable to go with sale purchase transaction.let the retailer raise the invoice to customer and you take your part by raising invoice on retailer.
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