• Taxes that need to be paid by an e-commerce company in India

Dear Sir/Madam,

We are going to start an e-commerce company in Chennai. We will sell the products of our vendors through our website and take a commission of 10-20% of the product value that has been sold. The VAT will be paid by our vendor. Apart from VAT , what are the taxes that need to be paid by us as an e-commerce company based in Chennai?
Asked 9 years ago in Income Tax

You will be required to service tax as well. And as regards direct taxes, income tax will be payable.

Shashank Surana
CA, Chennai
60 Answers
5 Consultations

You required to pay service tax if your commission increases 10lac limit in a year.

Monil Shah
CA, Ahmedabad
4 Answers

As you have income in the nature of commission , you need to pay service tax on ur service after claiming one time exemption of Rs 10,00,000..

Secondly, you need to pay income tax presuming you have ample profit..after claiming tds deducted by party

Thirdly you need to deduct tds and deposit the same timely and file the tds return too.

Fourthly. There many taxed related with payroll such as PF ,ESI and Welfare fund etc. U need to deduct and deposit the same.

Lastly.. If you are availing the services which are fall under the category of reverse charge mechanism, you need to pay service tax on the same..

Hope this will serve your purpose.

Let me know incase you need further assistance

Deepak Rathore
CA, New Delhi
38 Answers
5 Consultations

If the goods are purchased and sold in your name, you will be a dealer and VAT will be payable by you. However, it seems that you are not the dealer and the bills are raised by your vendors through you. Hence VAT is not applicable to you and vendor will have to pay the VAT.

So far as you are concerned you will be liable to pay service tax on your services as business auxiliary services.

B Vijaya Kumar
CA, Hyderabad
1019 Answers
124 Consultations

As per your version, if the commission goes above 10 Lakhs then you are liable to take service tax number and pay service tax. You need to collect the same from the vendors from whom you are receiving commission and pay the same and if the commission is inclusive of service tax then you need to calculate accordingly.

Apart from Service tax and Income tax in my view no other taxes are applicable to you.

Shyam Sunder Modani
CA, Hyderabad
1409 Answers
164 Consultations

From the above it seems that your arning are limited up to commission that you will charge with the vendor . Your services may be covered under the Business auxillary services and are chargeable to service tax . Apart from this you are liable for the income tax . However for the local tax you can enquire with local tax consultant .

Prakash Sinha
CA, New Delhi Area, India
120 Answers
20 Consultations

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