Clarification required - Business & Economy - Entrepreneurship - TIK Share

Clarification required


rishabh sultania

2014-09-04

Starting a ecommerce business of selling ayurvedic cosmetic branded company product.

If I purchase product as per the order recived by me from the company and than resell the same, than what all taxes will be applicable to be, what all tax registartion will be required, how the billing part will work.

If I asked the company to directly bill my clients and give me the comission than what all taxes will be applicable to be, what all tax registartion will be required, how the billing part will work.

Is any exemption provided for the product i deal in.

 

Please assist.

CA Pulkit Sharma

2014-09-04

Lets break your options and understand the registration you have to take.

1. You buying from suppliers and selling to customers:

In this case since you deal in goods service tax is not applicable. You are a dealer who deals in commodities. You have to take VAT registration in case your turnover cross the minimum limit specified in the VAT act applicable to your state.

You have to also pay professional tax if applicable in your state. As of now except Delhi... professional tax is applicable in almost all states.

Depending on number of employees you employee, you have to take PF (20 or more employees).

Shops and establishmnet registration as applicable. Trade license if local laws require so.

Also you have to take necessary license from other authorities which govern selling of ayurvedic products.

2. You work as a commission agent:

Here you provide your professional services as a commission agent. You have to charge service tax if your receipts cross 10 lakhs in year. However registration is required once your receipts cross 9 Lakhs in a year.

Vat registration is not required.

All other registrations are same except trade license in both cases.

The above opinion is given based on the limited information provided, please consult your advisor before taking any step based on above opinion.

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