Dropshipping requirements

Dropshipping requirements

Hello,

I want to start dropshipping work through online Shopify store from the vendors located outside India. Products will be shipped directly by the vendor to the customers located outside India. I will not have to handle or hold any inventory at my end.

1. In the beginning, can you suggest any formality be completed?
2. Is it necessary to have a current account in my name or I can operate through my saving account?
3. Initially, the turnover will not exceed Rs 20 Lacs. So it necessary to have GST registration?

Thanks in advance

Rajbir Singh

Asked 6 years ago in GST

So from the above question what I understand is that you are neither importing the goods now exporting the goods you are going to act as a retailer who doesn't keep the stock and fulfills the order so everything would be done outside India.

Therefore in such case I don't think there would be any GST applicable.

I think the company (Shopify) might ask you to have a current account and I think it would be better to have a current account as you are going to receive foreign income so it would be easy for you to bifurcate.

I think later on you will also be required to get some forms signed by CA and get permission from FEMA. Please consult a FEMA expert regarding this.

Naman Maloo

CA, Jaipur

4293 Answers

101 Consultations

Talk to Naman Maloo

Hi,

1. You should have a PAN.

2. You an operate through your savings account.

3. Yes, GST will be compulsory.

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

Talk to Abhishek Dugar

Dear Sir,

Hope you are doing well !

1.You don't need to comply so much formalities, just need to have your PAN.

2.You can operate through your saving account.

Current account is more suited individuals who are required to carry out frequent money transfers like businessmen, firms, companies, organizations, public enterprises, etc.

3.Since turnover is not exceed Rs 20 lakh so you do not need to required GST registration.

Thanks & Regards,

Payal Chhajed

CA, Mumbai

5188 Answers

299 Consultations

Talk to Payal Chhajed

Hi,

- You will act as an Intermediary between foreign vendor and Indian customer. You will receive orders from Indian customer and pass on to foreign vendors which will result in to payment of commission to you from foreign vendors.

- The above services will be treated as export of services.

- Open separate current account only for this business. Don't use saving account as it will result in to transactions from multiple sources which will be difficult for you to proove.

- Obtain GST registration.

Thanks

Vivek Kumar Arora

CA, Delhi

Available Now

4958 Answers

1108 Consultations

Talk to Vivek Kumar Arora NOW!

Hi Rajbir,

1.It will be treated as export of services.Export of services are called Zero rated supplies under GST.

2.The current account is mainly opened by people who are into the business which requires frequent deposit and withdrawal. It is advisable that open separate current account only.

2.Yes, GST registration will be compulsory.