Section 92E ; Buying from International eBay in $ using credit card

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Richard (Querist)
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29 July 2016 If a electronic equipment is bought by a sole proprietor from Alibaba or international Ebay , Will it come under provisions of section 92E under international transaction. Would he be liable to submit Form 3CEB , if the equipment bought is for 1. Personal purpose 2. Business purpose? Kindly answer.

Richard

Richard (Querist)
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01 August 2016 Kinda Wished some CA would answer... But it seems the same old the same old and there are no shortcuts. Anyway, To answer my own question, No for both, unless you're importing from a associated enterprise. " Associated enterprise" has been defined a lot : Like holding 51% of the exporting company etc... Basically, If you're importing from a company you're having no relationship with(relation in the sense, that you have significant interest in the P&L of that company) , You're clear. That transaction will not be considered a international transaction, but as a cross border transaction.

Aashok Kumar Sharma online

Aashok Kumar Sharma online

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23 July 2025 You're absolutely correct in your self-analysis — and to elaborate clearly:

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## ✅ Applicability of Section 92E & Form 3CEB:

**Section 92E** of the **Income-tax Act, 1961** requires submission of **Form 3CEB** *only if there is an international transaction with an Associated Enterprise (AE)*.

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### 📌 Key Concepts:

- **International transaction** (as per Section 92B) includes purchase, sale, lease, service, etc., between two or more associated enterprises where *at least one is a non-resident*.
- **Associated Enterprise (AE)** is defined in **Section 92A** and typically refers to entities with:
- Direct/indirect control over 26% or more voting rights,
- Significant influence,
- Common control via board participation or management control, etc.

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### 🎯 Your Query in Two Parts:

#### 1. **If the item is bought for personal use (not business)?**
- ✅ **Not taxable** under business income.
- ✅ **Section 92E & Form 3CEB** **do not apply**, since:
- There's no associated enterprise,
- There's no business transaction.

#### 2. **If the item is bought for business use?**
- ✅ Treated as an **import purchase**, allowed as an expense/capital asset in your books.
- ✅ **Still, Section 92E/Form 3CEB do not apply** *unless*:
- The seller is an **Associated Enterprise**.

🟡 Just buying from **Alibaba** or **eBay international** using a **credit card** from an **unrelated foreign supplier** does **not make it an "international transaction" under transfer pricing rules.**

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### 📎 Additional Compliance?
- While **Form 3CEB is not required**, ensure:
- **Import duty** & **GST (if applicable under reverse charge)** are handled properly.
- Maintain **invoice**, **payment proof**, and **import documentation** for audit and expense claim purposes.

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### ✅ Conclusion:
> Buying from Alibaba or international eBay for either personal or business use **does not attract Section 92E** or require **Form 3CEB**, **unless** the supplier is your **Associated Enterprise** as defined under **Section 92A**.

Let me know if you want a checklist to verify AE status or record such imports in your business books.

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