i want to start a dropshipping business and my business model is i will build a website and i post products from a Chinese website aliexpress and then when customer buy something from my website then i will place order from aliexpress and the product will be shipped it directly to customer ( Product will never come to india and never goes from india ) its dropshipped from directly china to other country except INDIA so my question is SHOULD I CHARGE GST FROM CUSTOMER AND ALSO SHOULD I PAY GST TO GOVT. ? If your answer is yes then tell me how much should i charge and pay?
Here are the few points as per your dropshipping business -
a) First of all to accept the payments you need the Payment gateway on your website so if you go with the paypal india or any international payment gateway, they required the documents.
so you have to just register your company with the new gst registration under the export & open a current bank account.
b) Now if you are doing simply dropshipping but you can charge the commission as mediator from the sellers so if sellers are from India then you have to charge the GST.
c) if your sellers are listed on the aliexpress and you directly order throughout them then its not proper dropshipping. because dropshipping is like where you contact directly to the sellers.
So Ultimate GST is charge only on the commission from sellers in case of drop shipping business if sellers are from India. Hope now your points has been cleared.
Note - Remember once you opt GST Registration then you have to follow regular legal compliance like GST Return Filings etc.
As per the GST Laws, GST is charged only on the sale & purchase of goods in India. In your case of drop shipping business, your goods are not being bought or sold inside the territorial boundaries of India. Instead, you are buying the goods from a Chinese website and selling them abroad without entering them into India. Hence, GST will not be applicable .
You are not supposed to charge GST from your buyers, nor are you supposed to pay GST to the government on sale of goods. Moreover, GST is not applicable
However, you need to duly follow the GST return filling procedure and file all types of GST returns on time. You need to file the GSTR-1 as to furnish the details of the sales made by you. Further, as you are dealing as an e-commerce operator, you need to duly file the GSTR-8 on every next month. Though you are not paying or charging GST, you need to furnish all the details regarding your transactions to the government.
Know more about GST return filling and GST registration process in India.