2 questions about exports

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Brandon Falk (Querist)

20 May 2013 Thank you for all your help on this website, I check it a lot.

I am buying various items in India and then shipping them by courier to the U.S. I have an IEC code. My questions are.

1. Do I need to register for a VAT # even though there is no VAT charged on exports?

2. Do I need to pay TDS on the amount I am paying to the courier for international shipment of exports?

I'm thinking the answer is "no" to both of these, but have heard various things, so I wanted to double check with the experts. Thanks :)

in His grace,
brandon

Brandon Falk

Brandon Falk (Querist)

28 May 2013 Does anyone have an answer to either question?

thanks.

in His grace,
brandon

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

14 July 2024 Hello Brandon,

Let's address your questions regarding VAT registration and TDS implications for your exports from India to the U.S.:

### 1. VAT Registration Requirement:

- **VAT (Value Added Tax) in India:** VAT has been subsumed under the Goods and Services Tax (GST) regime in India since July 1, 2017. For exports of goods from India, GST is not applicable as exports are zero-rated under GST law.

- **Need for VAT Registration:** Since you are exporting goods and not selling them domestically within India, you generally do not need to register for a VAT number (or GST registration in the context of India’s current tax system) for the purpose of exporting goods.

- **Exporter's IEC (Import Export Code):** Your IEC code is sufficient for exporting goods from India. It uniquely identifies you as an exporter and facilitates customs clearance and other export-related formalities.

### 2. TDS on Courier Charges for International Shipment:

- **TDS (Tax Deducted at Source):** Typically, TDS is applicable on specified payments made within India, such as payments for services provided by residents or certain contractual payments.

- **International Courier Charges:** Payments made to a courier for international shipment of goods (exports) from India to the U.S. do not attract TDS. These payments are considered as part of the logistics cost associated with export and do not fall under the categories where TDS is required to be deducted.

### Conclusion:

- **VAT Registration:** You do not need to register for a VAT number (GST registration for exports) since exports from India are zero-rated under GST.
- **TDS on Courier Charges:** No, you do not need to deduct TDS on payments made to the courier for international shipment of exports from India to the U.S.

### Additional Advice:

- **Documentation:** Maintain proper documentation for all export transactions, including invoices, shipping documents, and proof of export (customs declarations).
- **Consultation:** It's always beneficial to consult with a tax advisor or a Chartered Accountant who specializes in international trade and taxation to ensure compliance with both Indian and U.S. export regulations and tax laws.

By following these guidelines, you can ensure smooth and compliant export operations from India to the U.S. If you have any more questions or need further clarification, feel free to ask!

Safe and successful exporting!

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