Regarding taxation for online business

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2015 Hi,

I run an online business with the following income streams and need advice on whether I need to register and pay for sales tax or service tax for any of them:

1. Website development and maintenance services. All customers outside India. Payment collected via paypal and via a reseller. Even the reseller pays to us in our paypal accounta and from paypal account, we transfer it to our Indian Bank account. The total amount earned is above 10 lakhs p.a. but this is an export of services. I have read that this is exempt from service tax, but I need confirmation. Do we need to register/collect service tax?

2. Online sale of digital products such as Question banks and study notes in PDF format. Sales all around the world. Total sales below 5 lakhs. Do we need to register for sales/VAT, etc for this?

3. Advertising income from google. We have a website on which we have placed google ads and we earn money from these google ads. Total income per year is about 4 lakhs. Do we need to pay service tax or sales take on this?

4. Affiliate income. We earn affiliate commission by selling digital products of various companies. Such as affiliate commission on web hosting, online software, study notes, question banks, etc. Total income is about 1 lakh p.a. but may increase substantially. Since we are reselling and just taking commission, I am sure there is no tax involved, but would still like to confirm.

I really appreciate any help regarding any of the above points.

Thank you,

CA. Chikkerur C R

CA. Chikkerur C R (Expert)
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29 July 2015 Dealing with Goods - Register with Sales Tax. No matter type of sale or payment. Advertisement and www design comes under service tax. Better to register without looking for exemption of 10 lakh

Querist : Anonymous

Querist : Anonymous (Querist)

29 July 2015 1. The thing is that these are digital goods and not physical. Also, they are sold online to customers outside India. That's why i wanted to know if sales tax is required.

2. regarding service tax, again, it's all export of IT services. i am not worried about exemption. But legally, am I required to collect and pay service tax for export of services?