Fund Transfer to buy digital goods

Hi, 

If I have an Indian company which wishes to buy digital goods from overseas then resell them in India-

1-What taxes are payable

2- Is there a limit to the funds hat can be sent out to pay for the goods? how do you demonstrate the purpose?
Asked 18 days ago in Corporate Tax from Australia
Dear sir,

If you are an australia based company and selling goods to india, in india only custom duty on import shall be applicable. also at the time of local sales in india local sales tax shall be applicable and income earned by your counter part in india, income tax shall be payable.

There is no limit for remittance of fund subject to real movement of fund take place and all necessary documents submitted to bank in time. also an Import Export Code required to be taken by indian counterpart on such trasanction.
Vishrut Rajesh Shah
CA, Ahmedabad
194 Answers
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Dear Sir,

First of all Bitcoin is not officially accepted by the Reserve Bank of India as per their latest guidelines.

So you can set up a subsidiary indian company who buy from overseas company and can sell bitcoin in india. Bitcoin being digital currency does not attract any indirect tax. However income tax shall be payable on the said income at full rate applicable i.e. 33.99%.

The fund movement can be done through any online payment mode like paypal or international bank account. 
Vishrut Rajesh Shah
CA, Ahmedabad
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Yes Profit will be accordingly only.

You need to check legality of the same, as per my understanding payment for purchase of bitcoin through official banking channel is not allowed. Still you can confirm with your indian bank.
Vishrut Rajesh Shah
CA, Ahmedabad
194 Answers
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Dear sir,

You have to take export & import license and pay custom duty on import. Further,local sales in India will attract local VAT and profit earned during the year by the Company will attract income tax. 

Thanks and Regards
Abhishek Dugar
CA CS B.Com
Abhishek Dugar
CA, Mumbai
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The tax is applicable on the invoice value of the imported goods. Sorry I am not aware about the rate for digital goods.
Abhishek Dugar
CA, Mumbai
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Currently there is no import duty on bitcoin import.

However if you opt for any services outside india a service tax shall be payable @ 15% on the said transaction value.
Vishrut Rajesh Shah
CA, Ahmedabad
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Sir for service it is very specific terms prescribed with respect to each type of services and there are 14 rules prescribed to determine their taxability. However in general parlance outside service means when service provide is out of india and service receiver is in india service tax is payable be recipient of services based in india.

You can purchase from any supplier outside india irrespective of country.
Vishrut Rajesh Shah
CA, Ahmedabad
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No import duty because no physical good is imported
Vishrut Rajesh Shah
CA, Ahmedabad
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If you import anything from supplier based in Hong Kong it will be treated as import.

However, I am not sure whether you will be liable to pay duty on Bitcoin or not as it is not physical good.
Abhishek Dugar
CA, Mumbai
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We assume that your query is answered by our profession colleague. For more mail at modani005@gmail.com
Shyam Sunder Modani
CA, Hyderabad
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Hello Sir,

Firstly is it legal to deal in Bitcoins in India. As far as I know it is illegal as per RBI policies and people deal with it in the grey market. 

Because if its illegal then the income earned will also be illegal.

No Service Tax/ Vat is applicable though.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
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Dear Sir,

I doubt it is legal in India. As afar as i know, its illegal.
Abhishek Dugar
CA, Mumbai
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For more mail at modani005@gmail.com
Shyam Sunder Modani
CA, Hyderabad
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Dear Sir,

I assume the point you are trying to make here is that buying and selling of bitcoin is legal. If that is the case then Income Tax @ 30% plus cess shall be payable by you.

Also take a note that the transaction should be an arms length transaction as the IT department may look into it to make sure that you are not avoiding taxes in India.

Trust this clarifies your query. 

Feel free to call / get back in case of further clarifications. 

Thanking You. 

Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Rohit R Sharma
CA, Mumbai
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Sir it is a legal activity only issue is currently there is no mechanism of legal registration required by any authority except normal business registration 
Vishrut Rajesh Shah
CA, Ahmedabad
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