GST on pharmaceuticals dropshipping

Hi

You will be chargeable to GST @18% on your profit element i.e. the commission income from such transaction.

Example, if you buy a medicine for 100 from Turkey and sell it in US for 200, you need to pay GST @ 18% on 100 (200-100) I.e. 18.

Also you need to register under GST when you start this business. There's no threshold limit. 

#this answer is based on the general dropshipping model. We may discuss further based on any changes in relation to invoicing, etc.

Hi,

GST @ 18% will be applicable on your profit element/commission.

GST registration is mandatory.

HI,

Hope you are doing well !

How is the invoicing done?

How are you receiving and making the payments? Is it in foreign exchange?

Generally, GST registration compulsory irrespective of turnover.

GST @18% will be charged on profit element/commission.

There would be no refund for this GST paid.

Thanks & Regards,

Payal Chhajed

GST @18% will be chargeable on the commission/ profit element. You will need to get GST registered

Hi,

- In general it is a dropshipping business model because of the movement of the goods but from accounting and GST perspective it is an outright sale. Turkey will raise Invoice to you and you will raise Invoice to cutomers. It will be treated as export of services and therefore you need to apply for GST and LUT for it for export without payment of taxes.

Thanks

Hi,

Hope you are doing well !!

Your services will be treated as export of services.

In case of export of services, the exporter will have an option to either pay tax on the output and claim refund of IGST or export under Letter of undertaking (LUT)/ bond without payment of IGST and claim refund of Input Tax Credit (ITC).

Thanks & Regards,

Payal Chhajed

In that case, it would not be classified as commission income and only a trading income. The turnover limit of 20 lacs shall apply. You need to register under GST once your turnover crosses 20 lacs.

Hi,

It will be treated as export of services i.e zero rated supply.

Any person making a Zero Rated Supply can opt for one of the following two options, as per Section 16(3) of the IGST Act:

• Supply goods or services (or both) under a bond or Letter of Undertaking (LUT) without payment of IGST and claim refund of unutilised ITC, or

• Supply goods or services (or both) on payment of IGST and claim GST refunds of such tax paid