Hi
Where is the customer base? Will it be in India?
Regarding GST & import tax for an imported product
Hi, am going to start a business model in which I'll be having an E-commerce site with imported products around the world. Customers order a product from my site. I'll speak with the suppliers in the world and tell them to send the product directly to my customer. Its B2C model. Here should i collect gst from customer ? And should i also pay gst when I pay to the supplier. And should i have to pay import tax for that product. Say if am buying from China, there won't be any invoice that comes with the parcel. It will be mentioned as gift package and it will have recipient address plus price in dollars. Kindly clarify me on this.
Asked 6 years ago in GST
Yes, the customers are in india only. All my products will be max 2000 rupees. If i have to pay gst, how much it will be. Explain the full process of gst and import tax for my business
Asked 6 years ago
First of all, there is no GST applicability till your turnover reaches Rs. 20 lacs.
Thereafter, your profit element shall be taxed as commission income and GST @18% shall be applicable. Since it's a drop shipping business and not a traditional purchase sale business, only commission is taxable; goods are shipped directly.
As far as custom duty is concerned, it shall have to be paid, not by you but by the customer. There's a mechanism of collection of custom duties by the courier agency through which the goods are shipped.
On a alternative view, you may not tax your income as commission. In that case, you will have to pay GST in reverse charge on purchases and claim ITC of such GST paid while loading GST charged on sales. The rate of GST shall be according to the products that you supply.
i didn't understand the difference between commission and gst. yes am dropshipping. should i have to register my company in that case. if my turnover is jus 1lakh per annum, then should i apply for gst or not. if i need to apply for gst, i need to get by my name or company name. explain me how dropshipping legality in india. say the product costs 100 and i sell for 200, and will import tax is there for 200 worth product and if i sell for 200, how much is the gst?
Asked 6 years ago
Commission means your sale price minus purchase price. GST will be levied on such commission amount.
No GST requirement if turnover is 1 lac.
You can do such business through sole proprietorship, no need for registration.
You don't need to apply for GST registration till your annual turnover is within 20 lacs.
You need to pay only income tax; no GST; custom duty will be paid by buyer ( No custom duty if it is a gift package upto Rs. 10000).
Hi,
Your profit will be treated as commission and you will have have to pay GST on your commission income if it exceeds 20lacs per annum.
However, if supplier invoices you, then it will be your purchase and sale and you need to charge GST on sale amount also need to pay GST on purchase amount in reverse charge.
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