Dropshipping is 100% legal in India, meaning any person willing to open an online store can operate with this kind of business model without any fear of possibly breaking the law. Many big online retailers in India, like Amazon, Myntra, and Flipkart, follow this model and have experienced skyrocketing success through it.
What Are The Regulatory Requirements for Dropshipping In India?
In case you want to start a dropshipping business in India, then make sure that you have sound knowledge of the rules of Goods and Services Tax (GST). Indeed, every dropshipping business with a turnover over and above Rs 20 lakh has to go for GST registration. Failure to register GST when your sales are above this amount could lead to fines. GST is applicable to different rates for different products. Knowing these rates will, therefore, help you set the right prices and not violate any rules or laws.
Beginning the legal way with your dropshipping business, you require a GST number. One can avail it over the online application, and the process is quite easy. When you do have your GST number, then it becomes a mandate for you to file your GST returns regularly. This makes sure you pay the correct taxes and follow the rules. Depending on what you sell and how you run your business, you might also need other registrations and licenses.
Being a dropshipper in India, you may be exposed to a bunch of taxes like GST and income tax. That’s why it is pretty important you know how to arrive at these taxes for intrastate and interstate sales. Keep accurate records of your sales and monies collected for tax. It will go a long way in enabling you to file taxes correctly and keep out of trouble.
Most dropshippers end up hitting the wall of law because they don’t follow the e-commerce laws and tax rules. You must at all times update yourself with the legal requirements to avoid this. Regular checks and talks with legal experts can help you familiarize yourself with the rules of e-commerce and manage them.
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