Dropshipping and GST -Ecommerce Print on Demand Business

Hi,

- As your target customers would be outside India, it would be treated as export of goods. In case of inter-state sale of goods, you need to obtain GST registration before the first sale i.e. there is no threshold limit applicable to you for GST registration.

- Under GST, export is treated as zero rated sales. You have two options i.e. export without payment of tax for which you need to apply for the letter of undertaking after obtaining GST registration and the other option is export with payment of tax, under which first you need to pay tax from your own pocket and then claim refund.

- GST paid on Printvo invoice will be eligible for refund.

- You need to file two GST returns, Annual return.

Thanks

The traditional dropshipping business which i have come across are generally having target audience in USA and they procure their goods from China i.e. they market China goods in USA.

However in your case you will show the print design on your website and get it manufactured from some one in India and sell it and therefore it will fall under category of proper trader.

Anyways the article you have mentioned are proper:

1 You need to register under GST when you cross 40 lakh

2. Gst on export is 0% but only if you have an LUT

If you apply for GST you dont have to charge GST from your customers but even if you apply for GST you dont have to charge any GST from your customer as they are outside India and you will receive the amount in foreign exchange so GST would be charged at 0%

The calculation you have to do is that if you dont apply for GST the GST which the printer charges from you will be your cost but if you register under GST you can claim refund of such GST but at the same time you will have to pay fees to CA for filing your GST return and claiming refund or if you yourself can file all returns then getting GST number is more beneficial or if the fees of CA is less compared to the refund then also it would be beneficial.

Hope you find the information helpful, if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Legally you need to take registration since your total sale is inter state sale.

If you register for GST you can claim refund of GST charged by your vendor based on certain conditions that the export done by your vendor in that you are mentioned as the exporter and if the export is by way of courier then it would be difficult to get refund.

If you need any further clarification you can call.

Hi,

- Yes it is mandatory for you to register for GST because export of goods is treated as inter-state transfer of goods and in case of inter-state transfer of goods, limit of Rs. 40 lacs is not applicable. In the article shared by you it says except persons required to take compulsory registration u/s 24. 

- For return filing, you need to hire a CA. 

- Export is treated differently under the GST. To promote the export, the government has put it into the zero rated supply. There are two options available with the exporters.

1) For export without payment of tax- Obtain LUT which needs to be applied online.

2) For export with payment of tax- Pay tax and then claim the refund.

- GST paid on manufacturing is your ITC which you can be claimed as refund.

Thanks

Hello,

Yes, you will be required to get yourself registered under GST by the virtue of Sec. 24 as a person supplying inter-state supplies is mandatorily required to get GST registration. 

Your business model would be the same as mentioned in Case-F of the printrove.com link you specified in your question.

Regarding return filing and procedure to be followed.

You are not required to charge GST from the customer as this supply is termed as zero-rated. The input tax(GST) paid to the vendor while purchasing the product from him, will be eligible for refunds.

There are two options available with you:

I. You can export under Bond or LUT (Letter of Undertaking) and claim a refund of the accumulated Input credit of tax; or

II. You can pay IGST while making the supplies and claim refund of the same afterward.

I hope this answer satisfies your requirement.

Regards,

CA Hunny Badlani

Dear Sir,

Hope you are doing well !!

Yes, it is mandatory to get GST registration for export of goods.

The limit of Rs 40 lakh is not applicable if you are selling goods inter-state, i.e., from one state to another.

Under GST regime, the exporter has either of the two options:

• Export under bond without payment of tax
• Export along with tax payment and claim refund later

If you choose to pay GST up front on your exported products, there are a few things you need to do.

First, fill out form GSTR-3B and Table 6A on form GSTR-1. Then, check Table 3.1(b) on your GSTR-3B and make sure that the amount of tax you paid is equal to or more than the tax that appears in Tables 6A and 6B of form GSTR-1. After you submit the forms, Customs processes your refund claim, and automatically deposits the money into your bank account.

It is advisable to take a help of local CA for return filing procedure.

Hi

Firstly, you need a GST registration only once your turnover exceed 40 lacs.

When registered under GST, you can export without payment of GST under LUT. For the input tax credit (GST charged by your supplier), you can claim refund.

You need GST registration only when your turnover exceeds 40 lacs.

Once registered, LUT shall be applied online through the GST portal. You must have Foreign inward remittance certificates from bank to prove that the remittance for sale is received in foreign currency.

Maintain FIRCs records even when you're not registered under GST.