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Hello, fellow professionalsI have a website whi...

Hello, fellow professionalsI have a website which runs from India and based on the Dropshipping M...

Hello, fellow professionals


I have a website which runs from India and based on the Dropshipping Model. Please consider these before I tell you my query


I don't manufacture a single product. People place order in my website, they pay (US $)on my website.


From the backend of my website, keeping 20% as my commission, the rest payment is made to a chinese supplier, who then directly ships the goods to the customers.


Now, I need your help to understand the Tax implications of this model. I guess I would need to pay income tax as I am earning something in India. But as nothing is manufactured or sold in India, do I need to pay GST or any other taxes? I would highly appreciate if you could provide an insight into this.


Thanks and Regards,

Akshay Mittal

0
Chiranjibi Chapagain Jun. 08, 2018

I am answering your query dividing it into two topics:

Income tax:

yes, the commission earned is chargeable to Income tax. You will have to file your returns and pay tax on commission earned.


GST:

You will be liable to be registered under GST. This is because you are doing export of services in the form of commission by providing you platform to others as a E-commerce Operator, in this you need not pay any GST due to zero rated supply, by submitting LUT ( Letter of Undertaking ).

The reason is that Export is treated as zero rated supply and there will be no tax as such. However, you will need to comply with all the procedures.

(Export treated as zero rated supply under GST) but you have to do compliance's.

Hello, fellow professionals


I have a website which runs from India and based on the Dropshipping Model. Please consider these before I tell you my query


I don't manufacture a single product. People place order in my website, they pay (US $)on my website.


From the backend of my website, keeping 20% as my commission, the rest payment is made to a chinese supplier, who then directly ships the goods to the customers.


Now, I need your help to understand the Tax implications of this model. I guess I would need to pay income tax as I am earning something in India. But as nothing is manufactured or sold in India, do I need to pay GST or any other taxes? I would highly appreciate if you could provide an insight into this.


Thanks and Regards,

Akshay Mittal

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